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Ally Financial Inc. has been hit with a class action lawsuit for allegedly improperly claiming debt forgiveness on consumers’ repossessed vehicles in violation of state and federal law. The class action lawsuit was removed to federal court last week.
Plaintiffs Joseph and Danielle Riley filed the class action lawsuit alleging that Ally, formerly known as GMAC Inc., failed to comply with the federal Automobile Sales Finance Act when notifying consumers that it was repossessing their cars. The Rileys argue that Ally issued deficient repossession notices and therefore never had a valid claim to collect the sale deficiency debt from the putative Class Members. Subsequently, Ally purported to forgive the debts and filed 1099-C debt cancellation notices with the Internal Revenue Service, which provided the bank with significant benefits but burdened consumers with tax liability.
“Due to the wrongful 1099-C claims, Class Members have paid substantial additional taxes to the IRS, face onerous IRS collections activities, require tax liability consultation and defense expenses, among other economic harm, all for the alleged benefit of Ally Financial’s unfair, false, fraudulent, unlawful and deceptive claims of debt forgiveness,” the class action lawsuit says. The Rileys argue that Ally’s conduct offends public policy and harms consumers. Further, they argue that Ally knew or should have known that the post-repossession notices were defective and that Ally “continues to hold ill-gotten gains from, inter alia, unearned tax benefits from the alleged debt cancellation and debt forgiveness, together with profits and interest derived from that money.”
By filing the class action lawsuit, the Rileys seek to represent a class of “California consumers whose vehicle was repossessed pursuant to a California Retail Installment Sales Contracts, who were entitled to reinstate their contract, for whom Ally Financial issued an IRS Form 10990C for post-repossession sale deficiency amounts, and where the 1099-C was issued within four years prior to the filing of this Complaint.”
The Rileys argue that under California’s Unfair Competition Law, Ally must issue corrective forms, publicly admit that its notices were improper and participate in a corrective campaign. They also seek an order requiring Ally to indemnify the Class Members for any and all losses regarding IRS tax assessments and defense costs stemming from the issuance of the 1099-C.
The plaintiffs are represented by John W. Hanson and Michael E. Lindsey.
The Ally Financial Vehicle Repo Debt Forgiveness Class Action Lawsuit is Riley, et al. v. Ally Financial Inc., Case No. 3:14-cv-010305, in the U.S. District Court for the Southern District of California.
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45 thoughts onAlly Financial Hit with Vehicle Repo Debt Forgiveness Class Action
Ally gave a certain payoff amount when I was purchasing another vehicle and trading in the vehicle Ally had an account on. The dealership took the payoff that THEY QUOTED, and obviously applied it to the trade. 2 months later we are getting calls from Ally over an amount that they say was not included in the payoff….SORRY PAL…..NOT TODAY…..They start with the collections then proceeded to hit my credit reports. Then I am advised of a Class Action Lawsuit that they are getting hit with and I elect to join in.
I was included in the Class Action Lawsuit wherein Ally settled and agreed to forgive all debts, charges, and fees associated with the included classes. (In which I was in the “Nationwide Class”). The court order says that Ally has 90 days to remove ANY tradeline associated with the account to all 3 Credit Reporting Agencies (Equifax, Transunion, and Experion) from the date of the official court order (Sept 28th, 2021).
As this was going on, we get a notice from a collection agency who stated they are attempting to collect a debt on behalf of their client “Ally Financial”…..AFTER THE COURT ORDER ….Clear violation of a court order signed by a Federal Judge.
Ended up doing a recorded 3 way call with “Factual Data” and Ally. After I quoted, verbatim, the Court Order and it’s stipulations, the lady representative for Ally stated, “The loan has been paid off and the account is closed.” THANK YOU VERY MUCH FOR THAT TAPE RECORDED STATEMENT ALLY…..
Now, the tradelines have until December 28th, 2021 to disappear from my credit reports or ANOTHER round of lawsuits is forthcoming. These people are EVIL and PREDATORY. Ally is the shadiest bank out there. I have bought several vehicles since, and every time the dealership says that Ally is one of the banks they reach out to for financing, I emphatically tell them to NOT use them, otherwise I will walk away….I don’t care what kind of APR or deal they offer….I REFUSE to get in bed with these sharks ever again.
Car Repo’d no notice, from ally financial. I was never provided the states required legal notices that were required within 48 hours nor the itemized list of vehicle contents and posessions for +3 weeks and only received them after informing them I was seeking legal representation. Have ally financial representative recorded phone conversation stating that I was not noticed properly. Once I secured reinstatement of my vehicle loan my car was transported +100 miles away to an auction house where I was given less than 24 hours to claim it before it was to be auctioned for sale.
…No joke
Additionally the tow company stole items from my vehicle (ipod, money, camping equipment, personal items)
They told me that they don’t even have my vehicle. That they charged it off n I asked ok well if y’all don’t have it wat lender did they send it to cuz then wat ur telling me is that this third party lender came n repoed my vehicle with everything I own in it including my dead grandmother’s deed to her house n her death certificate. They told me they hadn’t even sent it out to a lender yet. That I need to call the police n file it as stolen. But I already have n they told me that i cant because it’s coming up in the system as repoed. This happened on oct 7th 2022 n I literally have contacted three companies because they all keep pointing fingers. The police told me it was ford that did it where I financed the vehicle which was in Detroit and I’m in Washington. But they say they are not responsible for the vehicle once it leaves the lot ally or the leinholder is responsible n the police keep telling me to contact. Ford n ally. Long story short they gave me the title n I came back home to Washington after my grandmother died, went too the dol put it in my name. Well then they didn’t put the lienholders name on it. Covid happened n wasn’t working for a bit n then when we did start back our hours were cut. I couldn’t afford it. My last payment was in June 2021. So as u can see the huge lapse in time n not once was I notified of repo or anything. N yes although my phone number changed because my ex was trying to contact me from jail after he tried to kill me n set my house on fire. My email address n my address stayed the same. My old landlord was allowing me to still receive mail there as it was vacant due to being remodeled. Everything I own is in that vehicle. Items that are not replaceable from my dead grandma n like I said important paper work. Someone plz help me. I have talked to all three companies n still have no idea. Where my vehicle with my belongings are n it’s been over 14 days. This is seriously affecting my daily life. Im constantly on edge, constant anxiety, constant sadness. I literally was living out of my vehicle n happened to get treated by my date to a motel room n then leave for 2 hrs n come back to my vehicle gone. The sad part about it was I was staying at a privately owned motel n the fact that I was a paying gurest n not once did the lady working there who saw it happen walked out n asked for information as it was an all black tow truck with no decals on it.
This same sh$t happened to me! Took it 4 hours away from where it was 30 min from my home originally and I TOLD the rep I was paying it and they towed it anyway! So I had to pay 400 for transport to get it Home. THENNNN they somehow forgot to add in the parts that my plates and personal items were not in the car at that shop they were back at the original shop! Such a freaking fiasco and like you I did not get any heads up no phone call nothing in the mail just woke up in the morning and boom my car was gone 😡😡
I bought a 2014 new Ford focus that ended up being a lemon law car. Ford has been sued in a class action law suit. I made my payments on time for years, but because my vehicle was in the shop most of the 5 years I had it and completely undeliverable for the last year I had the vehicle. I had to buy another car elsewhere. When I called Ally Financial, I had explained my situation to their billing dept, and had asked for a deferment of 1 month payment to be out on the end of the loan. I was told that it was not possible and there were absolutely no other payment options available for me. I really needed that month auto loan payment to go towards another vehicle.
I explained that I couldn’t made that months payment. You would think that a customer of 5 years with no missed or late payments would have been able to receive some sort of grace. But no, I was told that the vehicle would be reposted Nd I would still owe the remaining unpaid balance of my vehicle , which was $7,100. So I told their billing dept that the vehicle would have to be reposted, and where the vehicle was….which was at the Ford dealership, awaiting a forth transmission clutch replacement which was going to cost me $1,400. That amount due for the replacement was after , Ford agreed to pay $600 towards the replacement and labor and my extended warranty policy would cover. Because their had been numerous claims with my extended warranty my policy was only going to pay a small portion of the repairs. None of this mattered to Ally Financial.
This repossession ruined my credit. I paid a Bankruptcy attorney $600 to begun bankruptcy procedures, took the classes, but family crisis occurred and have put it on hold. Paying off creditors a little at a time, but this repossession has destroyed my credit.
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Thay ruined my credit too. I had just lost my child , and gave up on life for a little while. I always paid a month ahead for a year. Came at night and took car. Could have just asked and I would have given keys. I had to pay someone to drive me 2 hours to get personal belongings from car. I thought I was part of lawsuit from letter I had received.
I woke up on sunday with all my neighbors looking for me. I lost my pay but got a deferment on the car.
My driver’s license and All personal property inside. The truck guy waited to see me to the peel out with it being towed. It is unbelievable ly stressful. They are trying every trip in the book even telling me my name isn’t on the account that I’ve payed for 6 years. I’m considering legal grievances myself.
I have made every payment on time w/this company and come to find out today they literally only put $17 of my payments towards my principal and the rest towards interest. They claimed it was a glitch in their system. If it was a glitch why did it take me calling for you guys to catch after all of this time and why did you not allow me to access this info on your website? I requested a breakdown be emailed which by law they are required to provide and they have yet to provide it to me.
They ruined my husbands credit. His truck was stolen in October. They put it up for repossession in November knowing it was stolen. They refused to deal with my insurance claiming computer problems until the end of December. Now they are saying we still owe them over $3,000 for repo charges. Now they sold it to a collection agency.
I’m in Kansas and I had an agreement that I had to pay a certain amount and that the rest would be put on the end of my loan. That I had to get it to them by 24 hours and to call when I had the number. I paid it that night. They repossessed my car one hour after I sent it in. I have tried to reach them and they leave you on hold forever and I finally give up. Is there someone in Kansas I can talk to about a class action lawsuit?
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You’d think that after the 2014 lawsuit, they’d stop with these predatory tricks. But no, I got a bogus 1099c and they were probably banking on me to not be diligent in finding out what the Hell is going on. After going through mental breakdown bull in their 3 ring circus bozo phone system, I was told that they’d be sending a new corrected 1099c. A week and a half later I called them to find out what is going on. Same circus with people just trying to get me off the phone. Finally, I got the same answer “we’re working on it.” Meanwhile, I can’t file my taxes. I demanded a timeline and they couldn’t give me one, so I told them their time line is within the next week, or they’ll be hearing from my attorney. The bloodsuckers need to be stopped.
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