LITTLE ROCK, Ark (News Release) – Arkansas Attorney General Leslie Rutledge has filed a Consent Judgment today resolving a consumer-protection lawsuit in Washington County against Automatic Auto Finance, Inc (AAF)., Jorja Trading, Inc., Cashfish Motor Pawn, Inc. and Monte Johnston for unconsciousable and deceptive business practices involving the sale of used motor vehicles. Johnston owns the buy-here-pay-here dealership, AAF and its related businesses. A buy-here-pay-here car dealership is a business that handles all financing, payments and collections of vehicle purchases directly through the dealership and its related companies.
“Buy-here-pay-here dealerships cannot take advantage of vulnerable customers, and I will do everything in my power to ferret out those bad actors to protect Arkansans,” said Attorney General Leslie Rutledge.
The lawsuit alleged that AAF and its affiliates engaged in deceptive advertising and marketing of used cars, sales of vehicles, credit approvals, financing practices, unconscionable contract and payment terms, servicing practices, repossession and collection practices, dealings with debtors, impermissible irregularities after loan defaults, court actions against delinquent or defaulting customers, and other illegal actions. AAF and its affiliates claim that they have not violated any Arkansas laws.
The settlement reforms a number of AAF’s business practices. AAF is prohibited from doing business under multiple different names. AAF is now required to develop and utilize underwriting practices to ensure that consumers are not trapped in a vehicle purchase contract that they have no reasonable way of repaying. Consumers now have the opportunity to have a possible purchase inspected by a third party to verify its roadworthiness. AAF is no longer allowed to conduct verbal sales pitches in Spanish or Marshallese and require a consumer to sign a contract in English; it will be required to produce a copy of the contract in the language of the verbal sales presentation to those consumers who consummate the purchase. AAF is required to modify its vehicle servicing plans and practices as well as its irregular payment schedules. Other practices reformed under the Consent Judgment include procedures for repossession of vehicles after payment default, collection practices for customers who are in payment default, legal actions taken against defaulting customers and garnishment procedures.
Two landmark provisions for Arkansas consumers include a prohibition against suing defaulting customers in any small claims court using relaxed procedures that don’t afford adequate notice to consumers and a program offering a three-day right-to-cancel a vehicle sale, subject to reasonable restrictions set out in the Consent Judgment.
AAF’s owner, Johnston, is banned for sixty months from operating a used motor vehicle company that offers credit, financing or engages in collection of debts related to used motor vehicles or buy-here-pay-here businesses.
Current and former customers of AAF may be eligible to receive a credit for the amounts they currently owe. The Consent Judgment, filed in Washington County, secures over $1.5 million in credits for over 5,695 customer accounts and levies $3 million in suspended penalties against the defendants for any violations of the judgement. AAF and its affiliates are also required to pay $238,000 to the Attorney General’s Office for its litigation costs.
Victims of these business practices should file a consumer complaint on ArkansasAG.gov or call (800) 482-8982.