Multi-State Finance Company Signs Agreement on Repossessions

Header--Montgomery County, Maryland. Press Releases

Db/consreposs-_pr 99-40

Contact: Sue Rogan, 301/217-7391
or Sharon Wilder, 301/217-7429

For Release: February 10, 1999

Multi-State Finance Company
Signs Agreement on Repossessions

The Montgomery County Department of Housing and Community Affairs announced today that as a result of an investigation by its Division of Consumer Affairs, Monaco Finance, Inc., has paid $15,000 to settle a complaint about the firm's repossession practices. In addition, Monaco has agreed to waive more than $170,000 in damages it claimed were owed by 26 county consumers.

The Division of Consumer Affairs (DCA) alleged that Monaco, a Denver based financial services company doing business in 36 states, had misrepresented consumers' rights to redeem repossessed motor vehicles in violation of the County's Consumer Protection Act.

Under Maryland law, consumers are normally entitled to redeem repossessed motor vehicles by paying any overdue back payments. DCA alleged that Monaco sent repossession notices to 29 consumers in Montgomery County that said the consumers would have to pay off the entire balance of the loan in order to get their cars and trucks back.

As part of its investigation, DCA Investigator Sharon Wilder attempted to contact all 29 consumers. Seven of the consumers confirmed to Wilder that Monaco had told them they would have to pay off the entire balance of the loan in order to redeem their vehicles. As a result of the Settlement Agreement, each of these seven consumers has received a payment of $1,000.

Monaco also agreed to waive $172,460 in unpaid deficiency balances it claimed were owed by 26 county consumers, and the firm has agreed to delete any adverse credit information from the consumers' credit bureau file. Under a deficiency balance, a consumer whose motor vehicle has been repossessed and sold is required to pay the difference between the amount still owed on the vehicle and the amount the finance company got for the car at the repossession sale.

Wilder said that under the Agreement, "Monaco is required to inform Maryland consumers of their rights under state law in any future repossessions." Monaco will also pay $8,000 to DCA's consumer education fund and will make a good faith effort to conciliate any future complaints with DCA. Wilder said that any consumer whose car has been repossessed by Monaco should call DCA at 301/217-7373 to find out if they are covered by the Agreement.

"Everyone should pay their bills, but consumers still have rights when they get into financial difficulty," said DCA Division Chief George Rose in announcing the Settlement Agreement. "We will continue to take appropriate action to see that consumers are afforded the protections provided to them by state and county law."

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