Credit Acceptance Corp., one of the nation’s largest auto lenders to people with low credit scores, was slapped with a lawsuit from Massachusetts on Monday. The suit, which was brought by the office of Massachusetts Attorney General Maura Healey, alleges that the lender defrauded as many as 24,000 borrowers over a six-year period in the state, and seeks as much as $120 million in damages.
“This company made unaffordable and illegal loans to borrowers, causing them to fall into thousands of dollars of debt and even lose their vehicles,” Healey said in a statement. “We are taking a close look at this industry and we will not allow companies to profit by violating our laws and exploiting consumers.”
Shares of the company plunged nearly $73, or 16%, to just under $387 on the news of the lawsuit.
According to the suit, Credit Acceptance raked