Auto Lender Agrees to Half Billion Dollar Settlement

welcome once again to lato's law here's steve lato a good man named steven sent me notes said steve check out what i got in the mail today it's a check and it's a check from a class action and it's a substantial check and you know that's what you often talk about is that they have these class actions where you know there's three million affected people and they each get a coupon for 12 cents and the coupon looks like a junk mail postcard which you throw away and you never get 12 cents anyway and i remember getting one uh one of the most famous ones was the cd price fixing class action if you bought any compact discs in the late 90s you get a notice saying have you bought any compact discs if so some of the big manufacturers were accused of price fixing and as a result of that fill out this form and you'll get a portion of whatever the money is in the pool based on how many people respond and it came out to about i think 12 cents a piece i don't know if that's the one there was a couple of them like that but i remember getting the postcard and the postcard actually was a check strangely enough but uh for 12 cents but the thing is that there are some class actions where somebody will actually get something of value and steven got a check for 261 dollars 261 dollars now that is a check worth cashing okay so where it came from is interesting uh a settlement with santander which is an automobile finance company and i've got the press release here coalition of 34 state attorneys general announce over 550 million dollar settlement with nation's largest sub-prime auto financing company so santander was taken to task by 34 states and they agreed to pay back 550 million dollars to consumers they dealt with depending on the situation of that dealing the coalition was led by illinois attorney general kwame raoul and was announced just this past may it includes 550 million dollars in relief for consumers with even more relief in additional deficiency waivers expected so some people will get checks and some people will have their deficiencies waived when their vehicles got repossessed and so on the settlement resolves allegations that santander violated consumer protection laws by exposing subprime consumers to unnecessarily high levels of risk and knowingly placing consumers into auto loans with a high probability of default the may 19 settlement stems from a multi-state investigation of santander's subprime lending practices in march of 2015 the illinois attorney general's office led the coalition in opening the investigation into the largest subprime auto financing company in the country after receiving an increase in consumer complaints related to sub-prime auto loans so i'm sure you know this but if you go in to buy a car at a dealership and you want to have it financed they'll often lend you the money to buy the car from them and that's called a purchase money security interest and you do a retail installment sales contract and you'll walk out with a car and you may have only put some money down or possibly even no money down but a promise to pay and of course the question becomes not just what did you pay for the vehicle i.e the purchase price but what is the rate of interest you're paying over how long and so if you've got really good credit or there's a good promotion going on or both you can get 0.0 financing sometimes you can also i've seen 0.9 1.9 2.9 but of course the numbers go up and it happens to be that the lesser quality credit you have the higher of an interest rate they want to charge you so the question then becomes what happens if they're actually lending money to people who are likely to default there's a similar thing happening in the early 2000s of course with home loans but now we're talking about automobile loans based on the multi-state investigation the coalition alleges that santander through its use of sophisticated credit scoring models to forecast default risk knew that certain segments of its population were predicted to have a high likelihood of default santander exposed these borrowers to unnecessarily high levels of risk through high loan-to-value ratios significant back-end fees and high payment to income ratios as well the coalition also alleges that santander's aggressive pursuit of market share led it to underestimate the risk associated loans by turning a blind eye to dealer abuse and failing to meaningfully monitor dealer behavior to minimize the risk of receiving falsified information including the amount specified for consumers income and expenses finally the coalition alleges that santander engaged in deceptive servicing practices and actively misled consumers about their rights and risks of partial payments and loan extensions under the settlement santander is required to provide relief to consumers and moving forward is required to factor a consumer's ability to pay the loan into its underwriting the way it breaks down is something like this santander will pay 65 million dollars to the 34 participating states for restitution for certain subprime consumers who defaulted on loans between january 1st 2010 and december 31 2019 for consumers with the low quality loans who defaulted as of december 31st 2019 and have not had their cars repossessed santander is required to allow them to keep their car and waive any loan balance up to a total of 45 million dollars in collective loan forgiveness santander will also be up to 2 million for the settlement administrator who will administer restitution claims and pay an additional 5 million to the states the settlement also includes significant consumer relief by way of loan forgiveness in all santander has agreed to waive the deficiency balances for certain defaulted consumers with approximately 433 million dollars in immediate forgiveness of loans still owned by santander and additional deficiency waivers of loans that santander no longer owns but is required to attempt to buy back so this covers a whole bunch of states and 34. i won't list them all here right now if you want to find out more about this if you had a loan with santander or know somebody who did you might want to look into this and it's very easy to find when steven sent me the note and showed me the check that he got and i saw the check it's a real check thank you i i just simply ran the search for santander class action settlement and up popped a million things including this which was issued just a couple days ago or maybe a couple weeks ago but it's a press release the press release explains it all and it says you know more information go here and want to learn about this go here and if you think you might be a member of the class go here but you can look this stuff up it's very easy to do and you know here's the thing i know some people are going to say steve these people sign documents they knew what they're getting themselves into you know uh yeah but there's also consumer protection laws out there to protect people and you'd be surprised at the crazy stuff that happens at car dealers and i know people say oh no nothing would surprise me no no it'll surprise you i've been dealing with automobile law now for 30 years and the stories that i've seen and and other attorneys i've talked to have seen i was talking to my very good friends as an attorney just last week and uh he was telling me about a case he has where a woman found out that she was being chased for a debt on a car that she'd never heard of before in another state and a relative of hers had simply walked into a car dealership and said i'd like to buy a car and her credit was like as bad as you could get i mean it was the credit was she almost could have gotten his bum rushed right out of the building and um they said well you your credit's horrible and she said oh and they said can you get a cosigner and she said yeah i yeah of course i can and she told them that she could get this person in another state she didn't say this in another state but she goes i can get this relative of mine to cosign and uh somebody came into the dealership signed a document and uh now this vehicle gets given to the buyer not the person to co-sign but the buyer and the buyer takes the vehicle off and makes zero payments on it so the vehicle gets repossessed and they can't collect the money from the buyer because they got no money no credit so they start chasing this woman in another state who's never been to that dealer never been to that state didn't know about the car and was distantly related to the person but and the dealership says no she came in she signed documents she's on the hook it's like oh why does the signature dot match why do you not have any identification or proof that that person who's sitting there was the person claiming you know was who they claim to be it made no sense but the dealership didn't care they just wanted to sell a car and there's someone there saying oh i can get a co-signer and they a warm body shows up and signs a document now i don't know and my my attorney friend didn't know either whether the buyer was the one who set this up or whether it's something the dealership or both because the dealership should have some kind of checks and balances in place to make sure that if i sit down and say yeah i'm bob smith i'm here to co-sign a loan from my nephew what's your name again that you should at least double check to make sure i really am bob smith and uh i'm the person i claim to be and so it's very strange but those things happen all the time they don't happen all the time at every dealership i'm not accusing every dealership of doing that but that stuff happens and one of the things that the attorneys general were complaining about was they were saying that santander was not overseeing or supervising these loans the way they should have been and you might say steve the dealership does that work they send the i mean what do you want well once in a while they should double check this stuff you know so they should double check this stuff and and and they should for instance say and i'll give an example uh if you get a co-signer on a loan you need to get their identification from them to prove it's them call me crazy i i've i recently heard a story about that so stephen thanks for sending me the check and the tip he didn't send me the check itself just i mean image of the check but but he said hey check it out here's an actual check for 261 bucks that i got back on a class action so some class actions do work coalition of 34 state attorneys general announces over 550 million dollar settlement with nation's largest subprime auto financing company that would be santander questions your comments put them below those i'll talk to you later bye-bye thank you for watching latos law do not follow where the path may lead go instead where there is no path and leave a trail

Channel: Steve Lehto

Views: 31,750

Rating: 4.9574919 out of 5

Keywords: lemon law, michigan lemon law, lemon law attorney, lemon law lawyer, http://www.lehtoslaw.com, steve lehto

Id: 1z9U06j4D7k

Length: 11min 12sec (672 seconds)

Published: Sat Jun 12 2021