F&R Auto’s Lender to Pay Over $700K to Customers
BOSTON — Customers of a now-defunct auto dealership in Westport that used deceptive sales practices will receive over $700,000 in debt relief and refunds.
The announcement was made Thursday by Attorney General Maura Healey's Office, saying that Sensible Auto Lending LLC of Connecticut has agreed to provide $733,925 in relief for consumers who purchased vehicles from F&R Auto Sales.
“This settlement will give consumers victimized by these dealerships a clean slate by refunding them for faulty cars and repairing their credit,” said AG Healey in a press release. “Sensible Auto has also changed its business practices so that consumers are protected from fraud in the future.”
Last week, Healey's office announced that F&R Auto will be forced to pay $450,000 as part of a consent judgment. The settlement was the result of a lawsuit filed by the AG's Office against F&R Auto and former owner Francis Correiro after Healey's office received over 100 individual complaints from customers alleging deceptive sales and practices at the dealership.
The investigation also revealed that Sensible Auto Lending LLC facilitated F&R Auto's sale of defective and inoperable vehicles by supplying the dealership with financing even though the company was aware of consumer complaints against the dealership and their high default and repossession rates.
Sensible was also found to be in violation of the Massachusetts Cost of Consumer Credit Disclosure Act by failing to account for the cost of certain insurance policies that the consumers were required to purchase. The policies (Vendor Single Interest insurance policies) are meant to protect lenders when a vehicle is damaged or unrecoverable. However, Sensible used VSI claims to recover for credit losses, according to the investigation by the AG's Office. The illegal practice effectively caused the annual percentage rates on consumers' loans to exceed 21%, the state's statutory interest rate cap.
AG Healey's Office says the financial relief from Sensible will also be distributed to consumers who purchased vehicles from three other Massachusetts dealerships that utilized the auto lending company. Those dealerships are City Line Auto, Inc. of Fall River, Customer First Auto Group of Westport, and Buy-A-Ride of Raynham.
Sensible Auto Lending LLC will provide refunds to certain consumers, including those who purchased a vehicle from F&R Auto, complained of mechanical defects, and had their vehicles repossessed. Under the settlement, Sensible will also waive all outstanding debts for the hundreds of customers who purchased vehicles from F&R Auto and the three other dealerships. The auto lender will also repair consumers' credit with credit reporting agencies. Interest payments to consumers will also be refunded in cases where Sensible misused VSI claims.
Attorney General Maura Healey's Office says Sensible fully cooperated with the investigation and made substantial changes to its business practices. The company has agreed to begin tracking consumer complaints, repossession rates, and delinquency rates of the dealerships with which it does business.