Automotive Finance Corporation AFC Cal, ADESA, KAR AUCTION 500,000 Loans, Unlicensed Lender, Predatory, Usury, Flooring, Department of Corporations Carmel, Indiana
AFC is suing California car dealers in Indiana Courts for millions.
A complaint to the California Department of Justice regarding Automotive Finance Corporation (AFC) operating as an unlicensed lender in California from 1999 to 2007 was filed this month.
A half-million loans are alleged to have been made in violation of Californias usury laws. AFC, a subsidiary of KAR Auction Services (KAR), is a flooring lender for used car dealers.
They were accused of providing false information to the Department of Corporations on an Application for a Finance Lenders License on 1/27/2007, nearly eight years after operating as a lender in California with five branches.
Automotive Finance Corporation stated that AFC CAL, LLC had recently formed on January 23, 2007 in a filing with the Secretary of State signed by attorney-in-fact Mark T. Gillett of Morrison Foerster, LLP.
AFC also falsely stated in their Application that all loans were commercial and in amounts of $5,001 or more. In fact, thousands of loans were for amounts of $1,000 to $3,500, thus subjecting them to the restrictions of personal loans. Interest charges on these short term loans often exceeded 500% interest, which was never fully disclosed to the borrowers.
California businesses are under a coordinated attack by AFC attorneys, using Marion Superior Court in Indiana to deny due process to hundreds of car dealers that borrowed and transacted their business only in California.