- A Georgia dealer network faces bankruptcy after a federal agency cracked down on shady practices.
- The Consumer Financial Protection Bureau says US Auto Sales misused GPS kill switches on vehicles.
- The company that owned the dealer network might escape without paying anything to victims.
Buying a car with bad credit is tough—whether you’re in the USA or anywhere else in the world—but that doesn’t mean it’s impossible. A Georgia-based dealership called US Auto Sales touted itself as one of those ways. Sure, the interest rates were high, the vehicles often had lots of miles, and the prices weren’t great, but the dealer would sell a car to folks who would be turned away elsewhere.
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At its peak, US Auto Sales operated 39 dealerships across the Southeast, generating over $400 million in revenue by targeting deep subprime borrowers, those with credit scores between 500 and 550, before it went under in 2023, reports the Atlanta Journal-Constitution.
What customers didn’t realize, though, was that US Auto Sales could disable their cars remotely. In fact, according to the Consumer Financial Protection Bureau, the dealership network shut off vehicles more than 5,200 times while customers were up to date and current on their loan payments. On top of that, it reportedly did so an additional 1,500 times after explicitly promising customers that it wouldn’t.
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These findings and more are the subject of a lengthy lawsuit against US Auto Sales, as reported by the Atlanta Journal Constitution. In total, the dealer network erroneously disabled cars at least 7,500 times and that’s by the dealer’s own admission. One collections manager for the network said, “I can recall numerous customers telling me that they were stuck at Walmart or couldn’t pick up their kids because their car was improperly disabled.”
On top of that, the dealer was responsible for sending out false warnings to drivers—more than 71,000 times, according to the lawsuit. The company allegedly knew these issues could be fixed but thought it would be too expensive to do so. Adding insult to injury, it also double-billed customers, raking in millions of dollars through erroneous charges.
In November, a federal judge hit US Auto’s financing arm, USASF Servicing, with a $42.6 million judgment for its misuse of kill switches, double-billing, and other consumer protection violations. But by then, the company had collapsed, leaving little hope that affected customers would see any of that money.
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Meanwhile, the business that owns US Auto Sales, Milestone Partners, has apparently tried to distance itself from the scandal, arguing in at least one lawsuit that it shouldn’t be held accountable for the dealer’s actions. In the end, the consumers harmed by US Auto Sales might not get a dime from the dealer. However, if a judgment goes against it, there’s a chance federal relief funds could step in to cover some of the damages.
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