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Auto Lender Agrees to Pay $5.5 Million in Massachusetts to Resolve Allegations It Failed to Provide Compliant Deficiency Notices

auto financeAnother auto lender recently agreed to pay millions of dollars to resolve allegations made by the Massachusetts Office of the Attorney General that it failed to provide compliant deficiency notices following the repossession of automobiles from consumers within the Commonwealth.

A copy of the Assurance of Discontinuance entered into by Santander Consumer USA Inc. can be found here: Link to Assurance of Discontinuance.

Santander Consumer USA Inc. agreed to pay more than $5.5 million to end an investigation by the Attorney General that it failed to provide post-repossession deficiency notices that were based on the fair market value of the auctioned vehicles.

This settlement follows the record-breaking settlement between Credit Acceptance Corp. and the Commonwealth of Massachusetts where Credit Acceptance agreed to pay $27 million to resolve similar allegations it failed to provide deficiency notices based on a vehicle’s fair market value.

These settlements are effectuated by the Massachusetts Supreme Judicial Court’s groundbreaking decision in Williams v. Am. Honda Finance Corp., 479 Mass. 656 (2018), where the SJC held auto lenders “must expressly describe the deficiency as the difference between the amount owed on the loan and the fair market value of the vehicle, not the difference between the amount owed and the sale proceeds.” Williams, 479 Mass. at 657-658.

Significantly, it is now settled law that the holding in Williams applies retroactively, meaning Williams applies to all notices sent before Williams was decided. See, e.g., Dellorusso v. PNC Bank, N.A., 98 Mass. App. 84 (2020).

As the court noted in Dellorusso, there is “no compelling reason why [a lender] should enjoy more favorable treatment in exchange for the risk it took than American Honda Finance Corporation [], merely because American Honda’s case was decided first[.]” Dellorusso, 98 Mass. App. At 88.

The settlement amounts are so substantial because a violation of Mass. Gen. Laws c. 255B, § 20B, the statute regulating post-repossession procedures/notices, constitutes an unfair trade practice in violation of Mass. Gen. Laws c. 93A (the Massachusetts unfair and deceptive trade practices act), exposing lenders to treble damages.

This settlement is another reminder that auto lenders doing business in Massachusetts must make sure their post-repossession notices comply with Williams and reference the fair market value of the repossessed vehicle, not the price obtained at auction.

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Brady Hermann is senior counsel in the Boston and New York offices of Maurice Wutscher LLP. He regularly represents financial services companies including banks, broker-dealers, financial advisors, financial asset buyers and third party debt collectors in individual, class action and regulatory matters. He has successfully represented clients throughout the country against claims for violations of securities laws, the Fair Debt Collection Practices Act, the Telephone Consumer Protection Act, the Fair Credit Reporting Act, and various state consumer protection statutes. For more information, see

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