ST. LOUIS—The $377-million Alliance has settled a class-action lawsuit over alleged “deceptive” auto repossessions.
CUToday.info recently reported that the number of wrongful auto repossessions is growing.
Judge Joseph Whyte of St. Louis City Circuit Court on gave preliminary approval to the settlement and the class that the plaintiff’s attorney said will have about 300 members. A hearing is set for Feb. 13 for the judge to order judgment, St. Louis Business Journal reported.
Ben McIntosh of St. Louis-based SWMW Law LLC filed the lawsuit in October 2023 on behalf of Terrell Bailey, alleging that the Fenton-based credit union failed to send proper statutory notice to consumers before and after selling their collateral on allegedly defaulted auto loans. The credit union rejected the allegation in court filings, St. Louis Business Journal said.
McIntosh said the credit union’s pre-sale notice incorrectly informed debtors that their collateral would be sold at a “private sale,” but the post-sale notice said collateral was sold at a "public sale.” The form also violated state Uniform Commercial Code laws by not stating a time and place of the sale, preventing borrowers from monitoring or participating in a public auction, he said, St. Louis Business Journal reported.
The class action settlement requires Alliance Credit Union to wipe out about $3.6 million in debt to class members; create a $500,000 fund for class member payments, attorney’s fees and expenses; and ask credit reporting agencies to remove negative information from their credit scores. McIntosh estimated the class members each will get less than $1,000 in cash. He didn’t have a precise figure for the attorney’s fees that he will seek, St. Louis Business Journal said.
The class covers those whom the credit union mailed a pre-sale or post-sale notice after Aug. 24, 2017. Excluded from the class are those for whom Alliance Credit Union has received a final deficiency judgment and those who filed for bankruptcy after the date on their pre-sale notice and had such debt discharged in bankruptcy, St. Louis Business Journal said.