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December 12, 2013

Des Moines Used Car Dealer Agrees to Refund Improper Charges, Follow Iowa Truth in Lending Act

Attorney General's Consumer Protection Division alleges dealership sidestepped legal protections for consumers behind on their payments

(DES MOINES, Iowa)  A Des Moines used car dealer will refund improper fees it collected from customers, and has agreed to follow Iowa’s Truth in Lending Act, after Attorney General Tom Miller alleged the dealership failed to comply with state laws that protect vehicle buyers who are behind on their payments.

In an agreement with Auto Special Inc., at 4285 NW 2nd St., called an Assurance of Discontinuance, the dealership agreed to refund fees that the law did not entitle it to collect.  Those fees included late fees assessed before ten days after a payment due date.

Under state law, creditors must give consumers a ten-day payment grace period before the consumer is in default.  For the first default in a 365 day period, creditors must give consumers a notice of their right to cure the default.  Creditors must also offer consumers the opportunity to cure the default within 20 days.
Auto Special agrees to forgive any outstanding balance owed for any consumer who had their vehicle improperly repossessed in the past two years, and will refund consumers’ charges and fees associated with improper repossessions.

The dealership also agrees to change its existing and future contracts to reinstate required consumer protections for buyers behind on their payments, include accurate statements of a consumer’s Annual Percentage Rate (APR), total payments, total amount financed, and total sales price.

As part of the agreement, Auto Special is required to contact consumers within 90 days regarding refunds.


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