A complaint to the California Attorney General regarding unlicensed lending by Automotive Finance Corporation (AFC) was filed 12/10/09. Over 500,000 loans were alleged to have been made by AFC from 1999 to 2007 while they were unlicensed as a California Finance Lender.
Automotive Finance Corporation attorney-in-fact Mark Gillett of MORRISON FOERSTER filed on behalf of AFC Cal, LLC, stating that the company was formed on 1/23.
In fact, AFC already had five branches in California that were making loans, and had been since 1999, to thousands of car dealers in California.
To avoid scrutiny by the Department of Corporations, AFC falsely stated that all their loans were for at least $5,000. This untrue claim was made to avoid disclosing the thousands of loans by DSC for under $2,500 that would have been subject to separate regulations by the DOC.
Charges on loans could range from 100% to more than 500%.information concerning the true APR was never fully disclosed to borrowers.
AFC has filed hundreds of lawsuits in their home state of Indiana. Their target is used car dealers that took out loans to floor cars, most in states other than Indiana. Many of the cars floored were purchased at ADESA Auctions, a parent company, at local auctions.
AFC is under the umbrella of KAR Auction Services, Inc. (KAR) that went public on 12/10.
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