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A complaint was filed December 10, 2009 with the California Department of Justice regarding Automotive Finance Corporation (AFC) unlicensed lending in California from 1999 to 2007.

More than 500,000 loans are alleged to have been made in violation of California's usury laws.

AFC, a flooring lender for used car dealers, was accused of providing false information to the Department of Corporations when they submitted an application on 1/27/2007. Automotive Finance Corporation claimed that AFC CAL, LLC had just formed on January 23, 2007 in there filing with the Secretary of State signed by attorney-in-fact Mark T. Gillett of Morrison Foerster, LLP.

AFC also falsely stated that all loans were commercial and in amounts of $5,000 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. Charges on these short term loans could exceed 500% APR and was never fully disclosed to the borrowers.

Automotive Finance Corporation is owned by ADESA, a subsidiary of KAR Auction Services, Inc. (KAR). A S.E.C. filing in 2008 stated "AFC is subject to laws in certain states and in Canada which regulate commercial lending activities and interest rates and, in certain jurisdictions, require AFC or one of its subsidiaries to be licensed".

SEC Filings

ARTICLES OF ORGANIZATION OF AFC CAL, LLC filed 1/23/2007

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Anonymous
#946641

In reply to "AFC also falsely stated that all loans were commercial and in amounts of $5,000 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.

Charges on these short term loans could exceed 500% APR and was never fully disclosed to the borrowers."....all Commercial lines of credit are granted of at least $25k per dealer and if a dealer floor-plans a unit for less than <$5k that is up to the individual dealer. No laws were broken.

Anonymous
to Anonymous #1051721

If AFC did not own and sell you the auto, not to mention have a lien on the title (which they never have) they have to have a lending licence in that state. And unless they identify by vin number any particular auto on their bogus security agreement they have no right to that auto.

Check out the Federal banking laws, and the states Title loan laws!!!! These guys circumvent the laws with their very good (unethical) lawyers, and the US attorney's office and state courts are to *** to figure it out.

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