Flagship Credit Acceptance LLC has agreed to a $4 million class-action settlement against allegations that the subprime lender violated the Telephone Consumer Protection Act by “calling individuals on cellular telephones using an automatic telephone dialing system and/or a prerecorded voice,” according to a court filing.
Chadds Ford, Pa.-based Flagship “strongly disputes” that the calls were sent from an automatic telephone dialing system. However, the filing notes that litigation could have lasted years, and if Flagship were found in violation of TCPA, it could have faced hundreds of millions of dollars in liability, likely resulting in the lender’s insolvency.
The settlement awaits final approval from the U.S. District Court for the Eastern District of Pennsylvania, according to a March 19 motion. A total of 57,318 total claims were submitted to the court. Per the agreement, claimants will receive $43.40 each.
Flagship’s settlement is the second such TCPA agreement reached with an auto lender this week. Nissan Motor Acceptance Corp. agreed to pay $2.2 million to resolve allegations that it violated the Telephone Consumer Protection Act, according to a March 18 motion filed in California federal court. NMAC denied all liability in the case. Per the settlement agreement, NMAC will likely pay between $75 and $250 to each person affected by the allegations.
Violators of the TCPA can be liable for up to $500 per call and $1,500 per text if willfulness is established.
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