Subprime Auto Financer Settles Class Action Collection Suit

A consumer lawyer in Texas announced yesterday that his office had reached a settlement on a class-action lawsuit against a subprime auto finance firm for debt collection violations.

Attorney Richard Tomlinson said in a press release that Drive Financial Services, L.P. settled a class action lawsuit which represented a class of more than 1,150 Texas residents.  The suit charged that Drive sent threatening letters to Texas residents who fell behind in their payments. The letters threatened wage garnishment and purported to be from an attorney or law firm, which violated the Federal Fair Debt Collection Practices Act and the Texas Debt Collection Act.

Tomlinson filed the suit against Drive Financial on behalf of Houston resident Velincia Barber and others. The settlement requires Drive to pay the class $250,000 as well as pay Tomlinson’s legal fees and court costs. U.S. District Judge Sim Lake of the Southern District of Texas ruled that the settlement should be approved as fair, reasonable, adequate and in the best interests of the members of the class.

Drive Financial Services is a national consumer finance company specializing in automotive financing for consumers with limited or below average credit histories.