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WEST VIRGINIA RECORD

Thursday, November 7, 2024

Man sues Ally Bank for state law violations

Federal Court
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BECKLEY — A man sued Ally Financial alleging it violated the state's debt collection law.

Michael C. Sheridan, on behalf of himself and others, alleged the West Virginia consumer protection law by imposing unauthorized payment processing fees, known as "Pay-to-Pay Fees," on borrowers in violation of the West Virginia Consumer Credit and Protection Act, according to a complaint filed in U.S. District Court for the Southern District of West Virginia.

As a prominent automobile lender, Ally allegedly passes on its collection costs for monthly loan payments to West Virginia borrowers who make payments through telephone or online transactions, violating the CCPA.

Sheridan claims that Ally, functioning as both a lender and debt collector, unlawfully shifts its collection costs to borrowers, contravening West Virginia law.

Sheridan initiated the class-action lawsuit against Ally, seeking damages for unlawfully charged Pay-to-Pay Fees and an injunction to prevent the continued imposition of these fees. 

Sheridan claims Ally's Pay-to-Pay Fees significantly exceed market rates, suggesting potential profit motives or inflated third-party vendor agreements. 

Sheridan claims neither the loan agreements nor West Virginia statutes authorize the collection of Pay-to-Pay Fees, further emphasizing Ally's alleged violation of state law and contractual obligations.

Sheridan is seeking compensatory damages. He is represented by Patricia M. Kipnis and Jonathan R. Marshall of Bailey & Glasser.

U.S. District Court for the Southern District of West Virginia case number: 5:23-cv-00616

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