Consumer Protection – Default judgment entered against auto dealership

Where an automobile dealer misstated several charges on financing documents, in violation of the Truth in Lending Act, the customer was awarded statutory damages and attorney’s fees.

Background

Jose Cecilio Chicas Ramirez claims Peruvian Motor Sales Inc. violated the Truth in Lending Act, or TILA, and the Virginia Consumer Protection Act, or VCPA, by misstating several charges on financing documents connected to the purchase of a 2017 Toyota Camry in May 2024. The clerk entered default as to Peruvian in June 2025, and Ramirez now moves for default judgment.

Analysis

Peruvian failed to participate in this litigation, and its failure to defend this action does not appear to be based on any good-faith mistake or excusable neglect. Ramirez’s grounds offered for the entry of default are clearly established, and there is a relatively unremarkable amount of money involved in the litigation.

Ramirez has been prejudiced by Peruvian’s actions, and there are no material issues of fact needing resolution. With that said, the court finds that default judgment in Ramirez’s favor is warranted and will proceed to analyze the relief he is entitled to.

TILA

As a creditor under TILA, Peruvian is obligated to “disclose a long list of items” before the credit is extended pursuant to 15 U.S.C. § 1638(a). TILA requires these disclosures of terms of dealing—like finances charges, annual percentage rates, or APRs, and amount financed—to be accurate and clear.

Ramirez alleges that Peruvian incorrectly stated the amount financed, finance charge and the APR on the RICSA. These errors flowed from misstatements of the cash price of the vehicle and the down payment on the RICSA, which Peruvian allegedly explained were intentional misstatements “for paperwork purposes.”

Deeming Ramirez’s allegations as admitted, he has established Peruvian’s liability under TILA. Ramirez sufficiently alleged that (1) Peruvian was a creditor who regularly extended consumer credit; (2) Ramirez was in debt to Peruvian and (3) that Peruvian failed to comply with TILA’s disclosure requirements.

Damages

Any creditor that fails to comply with TILA’s disclosure requirements may be liable to a plaintiff for actual and statutory damages. Ramirez claims $117.524 in actual damages due to Peruvian’s overstatement of the sales tax on the car. Regardless, Ramirez does not show that this TILA violation—overstating the sales tax—caused him to pay more for the car. Ramirez fails to allege any other facts to suggest that Peruvian’s TILA violations caused him pay more or otherwise injured him in any way. The court therefore finds that Ramirez is not entitled to actual damages under TILA.

Ramirez also requests statutory damages available under TILA, which he may be entitled to even if he does not show actual damages. In an individual action, a creditor who violates TILA is liable for “twice the amount of any finance charge in connection with the transaction.”

In this action, which is “an individual action relating to a credit transaction not under an open end credit plan that is secured by real property or a dwelling,” the damage amount is confined to a range of “not less than $400 or greater than $4,000.”  The finance charge listed on the RICSA is $7,249.42. Ramirez asks for $2,000 in statutory damages. Since the request is within the statutory range, the court will award Ramirez $2,000 in statutory damages under TILA against Peruvian.

VCPA

The VCPA provides protection for consumers who are defrauded “by a supplier in connection with a consumer transaction.” But “[t]he VCPA does not apply to ‘those aspects of a consumer transaction that are regulated by the Federal Consumer Credit Protection Act,’ of which TILA forms part.”

“The alleged violations that fall within TILA’s reach are therefore inadequate bases for VCPA relief.” Ramirez’s claims that Peruvian misrepresented various line items on the RICSA in violation of Virginia Code § 59.1-200(A)(14) “are all so closely linked to the consumer credit transaction that recovery is unavailable under the VCPA.” Accordingly, the court finds Ramirez has not established his claim for relief under the VCPA.

Attorney’s fees

Ramirez’s counsel itemizes 2.6 hours of legal work at a $400 rate, for a total lodestar amount of $1,040. Ramirez supports the reasonableness of this rate with several declarations from undersigned counsel and experienced counsel practicing in this district. Upon reviewing the declarations, the court finds that Ramirez has carried his “burden of showing that the claimed rate and number of hours are reasonable,” and will award attorney’s fees of $1,040.

Plaintiff’s motion for default judgment granted in part, denied in part.

Ramirez v. Peruvian Motor Sales, Inc., Case No. 3:25-cv-00028, April 7, 2026. WDVA at Charlottesville (Yoon). VLW 026-3-167. 9 pp.

Full-Text Opinion

VLW 026-3-167
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