Utah has joined a $694 million nationwide settlement with auto-financing company Credit Acceptance Corporation to resolve allegations of deceptive lending practices, a development announced on Sept. 20, 2026. The agreement provides nearly $1.9 million in relief for 124 affected Utah consumers through debt cancellation and cash restitution.
Allegations of Deceptive Lending
State investigators alleged that Credit Acceptance Corporation, a major subprime auto lender, issued car loans that the company knew or should have known borrowers could not afford. According to state officials, the lender assigned risk scores to loans and anticipated high default rates, leading to vehicle repossessions for borrowers with low scores.
As reported by St. George News, the company's payment practices and weak oversight encouraged dealers to include costly extras, such as service contracts and gap coverage, in car deals without clear buyer agreement. The states allege that Credit Acceptance Corporation failed to sufficiently rein in these practices, often resulting in buyers paying for extras they did not realize they were purchasing.
Consumer Relief and Restitution
Under the terms of the settlement, which officially takes effect Nov. 2, 2026, 124 Utah consumers will share $177,935 in cash restitution. The agreement also provides $1,083,782 in full debt cancellation for consumers whose vehicles were repossessed and $526,810 in debt relief for residents who retained their vehicles.
Additionally, $122,092 will be paid directly to the state of Utah. Utah Attorney General Derek Brown stated that the settlement holds the company accountable and makes it clear that lenders who cut corners will be held responsible. "No company should be able to profit by setting its own customers up to fail," Brown said.
Mandated Lending Changes
The settlement mandates significant changes to how Credit Acceptance Corporation conducts auto financing. For a period of seven years, the company must cap vehicle sales prices at no more than 109% of the standard book value and is prohibited from allowing dealers to increase car prices based on a buyer's credit score.
Starting Nov. 2, the company must also offer a way for borrowers to exit certain risky loans that deteriorate quickly by canceling 95% of the debt and agreeing not to sue for collection. Furthermore, the company is required to inform buyers of the risk of falling behind on payments and disclose the actual value of the vehicle before they sign a contract.
State Enforcement Efforts
The enforcement action was conducted by Utah officials in partnership with the Utah Division of Consumer Protection. Katherine Hass, director of the Utah Division of Consumer Protection, stated that exploitation of vulnerable consumers through deception will not be tolerated.
"We remain committed to holding bad actors accountable and delivering justice directly to affected Utah households," Hass said.
Nationwide Scope
Utah joined 39 other states in the nationwide settlement, including Alabama, Arizona, Colorado, and many others. New York is also concurrently settling litigation against the company in the U.S. District Court for the Southern District of New York.
Credit Acceptance Corporation will directly notify customers eligible for debt relief, while an independent claims administrator will contact eligible consumers regarding cash restitution.
Contact Information
Utah residents with questions regarding the settlement can contact the Utah Division of Consumer Protection at consumerprotection@utah.gov.
