Ally Financial Inc. has agreed to settle for $19.7 million a 2014 class action lawsuit alleging the lender overcharged consumers who sought to purchase leased vehicles at the end of term, according to court documents filed in Florida federal court last week.
Borrower Robert Schreiber sued Ally on behalf of the proposed class after alleging that the lender charged him nearly $400 more for the lease-to-own contract that he bought from a third party, according to Law360. He claimed the overpayment constituted a breach of contract and violation of the federal Consumer Leasing Act.
Schreiber sought remediation for fees dating back to 2009, but because Ally did not retain full records dating back that far, the parties reached the $19.7 million figure based on data that was available. The lender did have records of buyers who were charged between $50 to $1,000 more for their car than the price listed on the lease, for an average of $238.
“Ally has reached an agreement to settle the class action lawsuit Schreiber v. Ally, related to dealer-document fees that may have been charged to customers in lease-to-retail purchase transactions,” the company told Auto Finance News in a statement. “Ally continues to believe that its customer experience is best in class, but also believes that settling the case at this time is in the best interests of all parties.”
Early on, Ally successfully brought the case into arbitration where it hoped to settle privately, however, a judge in the Eleventh Circuit overturned that earlier decision.
“This is an exceptional result for the class,” Schreiber said in a statement. “It offers class members benefits approaching or equivalent to a complete trial victory without the risks, costs, and delay of continued litigation, a trial and possibly an appeal.”
