Can I sue a lender for lying about my interest rate on a car loan?

The situation

I am writing from Ohio because I feel like I was completely scammed by a local dealership last month. On October 15, 2023, I went into the showroom to finance a used SUV. The salesperson specifically showed me a printed sheet that said my annual percentage rate would be exactly 4.5%. Based on that number, I signed the paperwork and drove the car home. However, when I sat down to review my actual monthly paycheck deductions and the final loan documents yesterday, I realized the actual rate they charged me is 12.5%. It looks like they intentionally used a confusing table to make the rate look much lower than it actually is. I already went back to the dealership two days ago to confront the manager, but he just claimed there was a 'clerical error' and told me I had to keep making the higher payments. I am incredibly angry because they clearly hid the real cost from me to get me to sign. I want to know if there are actual criminal penalties for a business owner who purposely gives me false information about my loan costs just to close a sale, or if I can only get my money back through a civil lawsuit?

Detailed Analysis

Based on the facts you provided, the dealership's actions may violate federal laws regarding consumer credit. Under the Consumer Credit Protection Act, there are specific rules about how interest rates must be disclosed.

Regarding your question about criminal penalties, the law provides for them if a person acts with intent. Specifically, the law states that whoever "willfully and knowingly... (2) uses any chart or table authorized by the Bureau... in such a manner as to consistently understate the annual percentage rate" shall be "fined not more than $5,000 or imprisoned not more than one year, or both"^[1]. This means if the salesperson used that confusing table specifically to make your 12.5% rate look like 4.5%, they could face criminal fines or jail time.

Regarding your ability to get your money back, you can pursue a civil lawsuit for damages. A creditor who fails to comply with requirements is "liable to such person in an amount equal to the sum of— (1) any actual damage sustained by such person as a result of the failure"^[2]. This allows you to seek compensation for the extra money you are being forced to pay due to the deception. Additionally, a successful lawsuit may allow you to recover the "costs of the action, together with a reasonable attorney’s fee"^[2].

However, the dealership's claim of a 'clerical error' is a significant factor. The law provides a defense for "unintentional violations" if the creditor can prove the error "was not intentional and resulted from a bona fide error"^[2]. A 'bona fide error' is a legal term for a genuine, honest mistake, such as a typo or a computer glitch, rather than a deliberate lie.

Note that state laws in Ohio may provide additional protections or different procedures for consumer fraud.

Statutory Citations

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