FAYETTEVILLE -- A lawsuit filed Friday in Washington County Circuit Court alleges some car dealers and financing companies in Northwest Arkansas are charging customers more interest than the law allows.
The suit was filed on behalf of Natasha Fletcher and names UAG Fayetteville II, doing business as Honda of Fayetteville, Landers Honda North and Fayetteville Autoplex, also known as Fayetteville Auto Park. It also names Ally Financial Inc., doing business as Ally Financial and Ally Financial Lease Trust.
The suit asks for rulings on whether the terms of the financing agreements violate Arkansas usury laws or the Arkansas Deceptive Trade Practices Act and whether customers are entitled to a refund of their money.
"These laws are designed to protect consumers from excessive interest," said Tim Snively, the Fayetteville lawyer who filed the complaint. "Obviously, they're violating these consumer protection laws in order to obtain excessive interest payments."
The suit seeks class action status on behalf of Fletcher and all other customers who were, or are, being charged interest above the state's 17 percent interest cap.
The suit contends Fletcher bought and financed a used 2011 Honda Insight from Fayetteville Autoplex in June 2013 and was charged 18.15 percent interest. Fletcher's loan was sold to Ally, according to the complaint.
The suit asks a judge to establish a class made up of Arkansas customers who signed similar contracts with UAG and declare Fletcher's contract, along with those of other class members, void as to both principal and interest.
The complaint says there could be hundreds, if not thousands, of customers who were charged an illegal interest rate.
Snively said he thinks a lot of people just think about getting payments they can afford and don't pay much attention to the amound of interest they're paying.
A call to Landers seeking didn't produce a comment.
NW News on 04/18/2015