LITTLE ROCK, Ark. (TB&P) — Arkansas Attorney General Leslie Rutledge announced Tuesday a settlement with Santander Consumer USA Inc. that includes approximately $550 million in relief for consumers with more relief in additional deficiency waivers expected. More than 13,000 Arkansas consumers are expected to be eligible for nearly $30 million in direct payments and debt relief.
The settlement, which was filed in Pulaski County Circuit Court, resolves an investigation conducted by a coalition of 34 attorneys general into allegations that Santander violated consumer protection laws by knowingly placing subprime consumers into high-risk auto loans who had a great probability of default.
“Santander’s predatory actions targeted Arkansans for high risk auto loans, and now it will pay handsomely for its deceptive practices,” said AG Rutledge. “The standards set by this settlement should serve as a warning to other bad actors who take advantage of financially vulnerable Arkansans: we will do the fighting for consumers and there will be severe consequences for illegal actions.”
A coalition of states began investigating Santander in March 2015. Following the investigation, the states determined that Santander, the largest subprime auto financing company in the country, used credit-scoring models designed to target consumers who were likely to default and subsequently failed to acknowledge dealer-falsified income amounts on consumer loan applications. Under the settlement, Santander will pay $65 million to the states for consumer restitution and will waive up to $433 million for consumers who still owe on their loans.
Read the full story on the Talk Business & Politics website.