Press Release  Auto Finance Company to Provide $765,000 in Relief to Consumers Who Were Sold Defective Cars

Boston — A Norwell subprime automobile finance company has agreed to provide $765,000 in restitution and loan relief to consumers who purchased cars from two used Massachusetts auto dealers that routinely sold defective and inoperable cars, Attorney General Maura Healey announced today.

“This company left hundreds of drivers with significant debt for cars they could not use,” said AG Healey. “We will go after schemes by auto dealers and finance companies that mislead consumers and will work to get people their money back.”

The AG’s Office entered into an Assurance of Discontinuance, filed in Suffolk Superior Court, with Source One Financial Corporation today. The settlement resolves the AG’s claims that the company’s business practices violated the Massachusetts Consumer Protection Act.

The AG’s Office alleges that Source One facilitated the sale of defective and inoperable cars sold by two dealers, Auto Drive One and Buy-A-Ride, that Source One knew engaged in a practice of selling bad cars. Source One continued to do business with these dealers despite the fact that it repossessed more than 30 percent of the cars these dealers sold. Source One failed to monitor and oversee the dealers, despite its policy not to do business with dealers that sell bad cars.  

In July 2017, the AG’s Office secured $50,000 in restitution for consumers from Auto Drive One, which also made significant business practice changes related to the routine sale of unreliable cars and unfair and deceptive sales practices. Buy-A-Ride is no longer in business.

Under the terms of the settlement, Source One will pay $200,000 in consumer restitution. Source One has agreed that it will waive more than $565,000 on loans that ended in repossession and will assist consumers with credit repair. The terms of the settlement also provide for business practice changes to improve oversight of dealers’ sales practices and track consumer complaints.

The AG’s Office continues to look into deceptive practices in the auto industry. Over the past year, the AG’s Office sued JD Byrider for misleading consumers and selling them high priced, poor quality cars financed with high cost loans – a package that consistently leads to repossession. The AG’s Office has also shut down a dealership for selling unsafe cars and obtained an injunction against another dealership to stop it from selling unsafe cars and from providing consumers with incomplete or inaccurate sales transaction contracts.

For questions about this case or about the auto industry in general, consumers may call the Attorney General’s consumer hotline at 617-727-8400 or file a complaint with the office.

The matter was handled by Deputy Division Chief Shennan Kavanagh and Assistant Attorneys General Samantha Shusterman and Lisa Dyen, all of the AG’s Consumer Protection Division.

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