Bank of America Failed to Properly Notify Borrowers Before Selling Repossessed Vehicles, Class Action Alleges
Nelson et al. v. Bank of America, National Association
Filed: November 4, 2022 ◆§ 2:22-cv-04440
A class action alleges Bank of America has failed to provide consumers with proper notice before repossessing and reselling their financed vehicles.
A proposed class action alleges Bank of America has failed to provide consumers with proper notice before repossessing and reselling their financed vehicles.
The nine-page lawsuit claims that Bank of America has systematically violated Pennsylvania’s Uniform Commercial Code (UCC) by giving borrowers less than 15 days to redeem their motor vehicle post-repossession. Under the UCC, a party, such as a bank or creditor, that utilizes self-help repossession is required to send a borrower notice of its intent to resell their vehicle “at the expiration of 15 days from the date of mailing the notice,” the case relays.
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“Because self-help repossession is effected without judicial authorization or oversight, the UCC requires secured creditors like the Bank to adhere strictly to the Code’s notice requirements,” the filing says.
However, the complaint alleges that Bank of America has sent to consumers across Pennsylvania template forms of a “Notice of Plan to Sell Property” that provide “an inadequate and commercially unreasonable” amount of time for the borrower to act.
According to the suit, the plaintiffs, two Pennsylvania consumers, financed the purchase of their vehicles by entering into retail installment sale contracts in 2016 and 2017, respectively. Under these agreements, the case explains, Bank of America financed the transaction, took a security interest in the vehicle, and became the secured party to which the plaintiffs made monthly payments. Per the filing, Bank of America declared a default and repossessed the first plaintiff’s Ford Explorer in May 2021 and the second plaintiff’s Chevrolet Impala in September of the same year.
The case claims that Bank of America mailed the first plaintiff a Notice of Plan to Sell Property on May 14, 2021, but stated that it would sell his vehicle sometime after May 27, only 13 days after the date of mailing the notice. Similarly, the bank said it would sell the second plaintiff’s automobile 14 days after the post-repossession notice was postmarked, the filing alleges.
The suit states that if a secured party fails to follow the proper procedures upon repossession, the UCC allows affected individuals to recover, at minimum, the credit service charge plus 10 percent of the principal amount of the obligation without evidence of harm.
The lawsuit looks to represent the following proposed class:
“All Persons: (a) who financed the purchase of a motor vehicle for consumer use through [Bank of America] or who financed the purchase through another entity but such finance agreement was thereafter assigned to the Bank; (b) from whom the Bank, as secured party, repossessed the vehicle or ordered it repossessed; (c) who had a Pennsylvania address as of the date of repossession; (d) in the period commencing six years prior to the date of filing of the Complaint through the date of class certification.”
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