Nation’s Biggest Buy-Here, Pay-Here Dealer Fined $8 Million

It’s been a bad week for debt collectors who employ questionable tactics. The largest buy-here, pay-here car dealer in the nation must pay an $8 million civil penalty after an investigation by federal authorities found it had repeatedly harassed consumers and furnished incorrect information to credit bureaus.

DriveTime Automotive Group offers car purchase agreements that require purchasers to return to dealers to make payments — its average customer has poor credit. The firm operates in 20 states and, as of December 2013, had 150,000 outstanding car loans. A remarkable 45% of DriveTime’s auto installment loans were delinquent at any time, according to the Consumer Financial Protection Bureau, which conducted the investigation.

The news comes one day after the Justice Department announced criminal charges against a debt collection company based in Georgia, accusing the firm of impersonating government officials while trying to collect debts. The firm, Williams, Scott & Associates, allegedly netted $4.1 million from 6,000 victims using such illegal pressure tactics.

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