Judge Halts Debt Collection Efforts In Least Auto Case

Attorney General Spitzer today announced that his office has obtained a restraining order against Charter One Bank to stop further collection efforts against victims of a trade-in scam involving the Least Auto dealerships.

Justice Patricia D. Marks, Acting Justice of the State Supreme Court in Livingston County, signed a temporary order barring Charter One Bank, F.S.B. from debt collection efforts and repossession of vehicles against consumers involved in the Least Auto Group case. The order also requires Charter One to return a recently repossessed 1999 Dodge Ram and restrains the financial institution from selling or disposing of any vehicles already repossessed related to the case.

"Defrauded consumers would be irreparably harmed again if collection efforts were allowed to proceed prior to the resolution of litigation against Least Auto Group," Spitzer said.

In December 2001, Spitzer’s office filed a civil lawsuit against the Least Auto Group of Geneseo and Livonia and its owners, Gary and Tarryn Least and an employee alleging deceptive business practices and fraud. Specifically, the lawsuit accused the dealership, among other things, of failing to pay off outstanding loans on trade-in vehicles that were used as payment toward the purchase of a new car at the dealership.

Due to Least’s illegal acts, consumers began receiving letters from debt collectors and financial institutions holding collateral interest in traded-in vehicles for loans they thought had been paid off. Consumers reported that they had been subjected to dunning phone calls and letters both at home and at work, negative marks on their credit records, a denial for a mortgage, and the threat of lawsuits.

On behalf of Least’s defrauded consumers, in early January, Spitzer’s office contacted the financial institutions and requested that they cease and desist collection efforts until the litigation against the auto dealership was resolved. Most financial institutions have honored the request. Charter One did not.

In fact, Charter One has continued to take aggressive actions against consumers to collect the fraudulent loans, including recently repossessing one vehicle.

Approximately 42 consumers have outstanding loans with Charter One related to the Least case.

Individuals with complaints about debt collection efforts arising out of Least Auto Group loans are strongly encouraged to contact the Attorney General’s consumer help line at (800) 771-7755.

Charter One Financial, Inc. - the 25th largest bank holding company in the nation, with $38 billion in assets and a reported 2001 net income of more than $500 million - is not accused of fraud in any of the financial transactions in this case.

This case is being handled by Assistant Attorney General Carlos Rodriguez of the Rochester Regional Office.

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