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Actions ‘a credit wreck for consumers’

November 22, 2010

Illinois Attorney General Lisa Madigan this month sued two Chicago area dealers for failing to make timely payoffs on the loan balances of customers’ traded-in vehicles, alleging the customers were unnecessarily hounded by creditors and forced to make payments on vehicles they no longer owned.

 

In separate lawsuits, Madigan charged Montell Chevrolet in Chicago and Montell Pontiac in Blue Island with violating the state’s Consumer Protection and Deceptive Business Practices Act. 

Madigan seeks to bar the dealerships from advertising or selling vehicles; a $50,000 civil penalty; restitution to any harmed customers; and additional penalties of $50,000 for each violation found to be committed with the intent to defraud.

 

In one instance, a customer on April 5 reportedly traded in her 2004 Pontiac Grand Prix, and the dealership agreed to settle the $22,500 loan balance within 10 days. A month later, the woman’s former loan provider began to call, stating the payoff had never been made and the loan was delinquent. 

After multiple requests, the dealer sent a payoff check to the provider on June 14, but the check bounced. Another check was sent July 5, and in late August, a final check was sent to pay the additional late payments and late fees due on the woman’s account. As of October, the woman’s credit report included negative remarks regarding late payments on the Grand Prix loan.

 

The attorney general’s consumer protection division received 14 consumer complaints against the Pontiac store and three against the Chevrolet store, all for taking from 45 days  to 167 days to settle their customers’ loan balances. Both dealerships are registered with the same principal.

 

"Trading in another vehicle when purchasing a new car is a common practice that, in these cases, turned into a credit wreck for consumers," Madigan said.

 

"Consumers were falsely assured . . . that the unpaid balances on their trade-in cars would be paid off, when, in fact, the businesses were stalling the payments."

 

The suits are filed in Cook County Circuit Court.

 

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