At The Podium
Staying Out of the Fire: Tips on how to manage costs and risks associated with consumer auto finance litigation
It’s a situation in which indirect lenders can find themselves: An automobile dealer sells a car to a consumer. The consumer’s loan, which takes the form of a Retail Installment Sales Contract (RISC), is sold to an indirect lender. Some time later, the consumer files a lawsuit against the dealer for claims related to the sale of the automobile and names the lender as a co-defendant. Despite the fact the lender played no role in the sales transaction, the Federal Trade Commission’s “Holder Rule” makes the lender responsible for claims the consumer might have against the seller, up to a cap.
In their presentation at the 2017 Oklahoma Bankers Association Annual Convention & Trade Show in Norman, OK, trial lawyers Michael Avery and Joseph Bocock review the most common types of claims asserted by consumers against sellers and lenders, discuss the effects and limits of the Holder Rule on lenders, and provide practical tips and strategies for managing such risks.