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Mass. AG Sues JD Byrider for Predatory Sales and F&I Practices

September 27, 2017

The attorney general of the Commonwealth of Massachusetts has sued JD Byrider, alleging predatory lending practices and sales of poor-quality vehicles for twice their retail value, among other charges. Photo by Tim Sackton
The attorney general of the Commonwealth of Massachusetts has sued JD Byrider, alleging predatory lending practices and sales of poor-quality vehicles for twice their retail value, among other charges. Photo by Tim Sackton

BOSTON — Attorney General Maura Healey announced today that she has sued Massachusetts used-car dealership JD Byrider for allegedly using predatory practices in its sale of defective vehicles with high-cost loans at four locations around the commonwealth.

The AG’s lawsuit alleges that JD Byrider took advantage of consumers by routinely trapping them in an unsustainable and unfavorable sales package, known as the “JD Byrider Program.” This program generally involves selling drivers a poor-quality car with a high cost loan, along with an expensive extended service contract, marketed through an aggressive and misleading advertising and sales campaign, Healey said.

“We allege that JD Byrider ripped off Massachusetts drivers by offering predatory loans for defective and inoperable cars. Our goal in this lawsuit is to recover losses to Massachusetts consumers and make this company pay for the harm they caused to thousands of drivers across this state.”

The AG’s Office filed the lawsuit today in Suffolk Superior Court against Venturcap Investment Group V LLC (d.b.a. JD Byrider) and its in-house finance company, Venturcap Financial Group LLC (d.b.a. Credit Now Acceptance Corp).

JD Byrider is a franchise of Byrider Franchising LLC, a national franchisor of JD Byrider buy-here, pay-here dealerships located across the country that typically provide credit to finance the cars they sell. In Massachusetts, Byrider’s Venturcap Franchise has dealerships at four locations: Brockton, Dorchester, Dartmouth and Springfield.

According to the complaint, consumers were unaware that JD Byrider priced its cars at more than double their retail value, and required drivers to sign on to a car loan with an annual percentage rate of 20%, regardless of their credit qualifications. JD Byrider bundles its expensive and limited extended service contract into the loan as well, forcing consumers to pay 20% interest on that product. To get the benefit of the service contract, consumers are then required to use a JD Byrider service center.

The AG’s office alleges that the cars sold by JD Byrider are defective and sometimes inoperable, despite misrepresentations of time and money spent reconditioning them prior to sale. Hundreds of cars have been returned by consumers to JD Byrider for repair within three months of purchase due to the mechanical breakdown of a major component such as the engine, electrical system, transmission, brakes or drivetrain.

The AG’s complaint further alleges that JD Byrider employs a faulty underwriting process that underestimates the consumer’s expenses and costs in order to qualify them for loans they can’t afford. As a result of these practices, the AG’s complaint alleges, more than half of JD Byrider’s deals fail or end in repossession.

Comments

  1. 1. Will Slattery [ September 28, 2017 @ 12:32PM ]

    There are some unethical dealers in Canada too, however our laws are less stringent and our Provincial Dealer Associations do not have the clout to enforce ethical practices and behaviours, unfortunately.

  2. 2. Scott Phillips [ September 28, 2017 @ 07:58PM ]

    Here we go again. It seems that new or used car dealer decides to get greedy. Now all of us are tainted with a Scarlet Letter that we must overcome. This incident is just more "proof" that car dealers are ripping off customers. The "horse trading image" car dealers try to overcome is now front page news. It is time that the nature of the business changes from predator to ally who wants to help their clients purchase a vehicle. Our customers are armed with knowledge of trade in price, retail price and financing all from their smart phones and the internet searches.
    Does your Buy Here Pay Here business have a 50% repossession rate? That type of news travels fast to potential customers.
    A very smart and successful business person on hearing that our little used car business was Buy Here Pay Here declared "It's okay to make money but don't get greedy. If you have pricing that is fair to both you and the customer you will have more business than you can handle."

  3. 3. Mike [ October 21, 2017 @ 07:21AM ]

    I think we all understand that a business is IN business to make money. I am sure they did not INTENTIONALLY do this due to the way they do financing (they get paid when customers make payments), however only time will tell. Its amazing how such a large company can have some that do not uphold the standards of the rest. Its unfortunate to all of the legitimate stores that share this same name. Like they say though, 1 bad apple spoils the whole bunch. I hope everyone involved in this particular situation can come to a mutual agreement and move forward in a positive way.

 

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