Debt Collection

Ally Financial Faces Class-Action over Unlawful Fees

Updated on
Published on
Ally Financial Faces Class-Action over Unlawful Fees

In the Southern District of West Virginia, a class-action lawsuit has been filed against Ally Financial, Inc., a leading digital financial services company. The plaintiff, Michael C. Sheridan, alleges that the company has been routinely violating West Virginia's consumer protection law by passing along its collection costs and payment processing fees to borrowers in the state.

Sheridan's complaint, filed on September 18, 2023, outlines how Ally Financial allegedly charges borrowers extra fees when they make their payments by telephone or online. These 'Pay-to-Pay Fees' are not authorized by the underlying loan agreements or any applicable statute or regulation, according to the lawsuit. "Defendant is both a lender and debt collector and cannot pass its collection costs to borrowers without violating the West Virginia Consumer Credit and Protection Act (CCPA)," the complaint reads.

The CCPA, enacted to safeguard consumers from deceptive and unfair business practices, prohibits unfair or unconscionable means of debt collection. Sheridan's lawsuit alleges that Ally Financial's actions violate the CCPA's prohibitions and its contractual obligations to borrowers.

The plaintiff is seeking to recover unlawfully charged Pay-to-Pay Fees and to enjoin the company from continuing to charge these fees. The class-action lawsuit represents all persons with an automobile loan securing a vehicle in West Virginia, where the lender or assignee is Ally, who paid a fee to Ally or its agent for making a loan payment by telephone or over the internet during the applicable statutes of limitations through the date a class is certified.

The legal theories behind the lawsuit center around the violation of the WVCCPA, including using unfair or unconscionable means to collect a debt, collecting unauthorized fees, and making fraudulent or misleading representations.

Sheridan's complaint is a stark reminder of the importance of consumer protection laws and the role they play in maintaining fair business practices. As the case unfolds, it will be interesting to see how the court interprets the allegations and the potential impact on Ally Financial's operations.

Case Facts

  • Status:
    Lawsuit Filed
  • Case Number:
    5:23-cv-00616
  • Filing Date:
    September 18, 2023
  • Jurisdiction:
    U.S. District Courts
  • State:
    West Virginia
  • Court:
    West Virginia Southern District
  • Plaintiff:
    Michael C. Sheridan
  • Defendant:
    Ally Financial, Inc.
  • Plaintiff Firm:
    Bailey & Glasser LLP
  • Defendant Firm:
  • Claims Administrator:
Contributors
Jerome Andries, Esq.
Jerome Andries, Esq.
Reporter and Licensed Attorney
Weekly newsletter

Stay up to date with new class action settlements you may join.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Complaint

This browser does not support inline PDFs. Please download the PDF to view it: Download PDF

Related class action lawsuits

Read more to get notified about updates to each case.

Consumers Allege Deceptive and Unfair Debt Collection Practices by Selene Finance, LP
Debt Collection

Consumers Allege Deceptive and Unfair Debt Collection Practices by Selene Finance, LP

A lawsuit claims Selene Finance engaged in fraudulent and deceptive debt collection practices
Ally Financial Faces Class-Action over Unlawful Fees
Debt Collection

Ally Financial Faces Class-Action over Unlawful Fees

Lawsuit alleges Ally Financial unlawfully charged 'Pay-to-Pay Fees' to West Virginia borrowers, violating the state's consumer protection law.
Northstar Location Services Faces FDCPA Lawsuit Over Alleged Deceptive Practices
Debt Collection

Northstar Location Services Faces FDCPA Lawsuit Over Alleged Deceptive Practices

Tonnette Samuels-Cox alleges that Northstar Location Services violated the FDCPA by providing a false itemization date in a debt collection letter.
United Collection Bureau Faces Lawsuit Over Alleged FDCPA Violations
Debt Collection

United Collection Bureau Faces Lawsuit Over Alleged FDCPA Violations

Natalie Rivero alleges that United Collection Bureau, Inc. violated the FDCPA, engaging in unfair and deceptive debt collection practices.
Lyft Faces Class Action Over Alleged FCCPA Violations
Debt Collection

Lyft Faces Class Action Over Alleged FCCPA Violations

Lyft, Inc. is facing a class action lawsuit alleging it violated the FCCPA by sending debt collection communications during prohibited hours.
Experian Faces Class Action Lawsuit Over Alleged FCRA Violations
Debt Collection

Experian Faces Class Action Lawsuit Over Alleged FCRA Violations

Experian is facing a class action lawsuit alleging violations of the Fair Credit Reporting Act. The plaintiff claims Experian failed to investigate disputes.