CFPB Issues Consent Order to Auto Financing Company over CFPA Violations

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The CFPB recently issued a Consent Order against a defendant auto financing subsidiary that services auto loans and leases originated by two separate car companies.  In addition to a civil monetary penalty of $4 million, the defendant is also required to pay $1 million to those whose vehicles were wrongfully repossessed based on the number of days the vehicle was wrongfully repossessed.  Defendant is also required to forgive outstanding charges associated with those consumer’s whose vehicles were wrongfully repossessed.

The Bureau’s Order details allegations, dating as far back as 2012, supporting that the defendant’s unfair and deceptive practices included wrongfully repossessed vehicles, retained consumers’ personal property from the wrongfully repossessed vehicles until consumers paid a “storage fee”, included a statement in contract extensions that erroneously appeared to limit protections for consumers going through bankruptcy and denied consumers making payments over the phone from the ability to select payment methods with lower convenience fees, among other violations.

As a condition of the Bureau’s consent order, the defendant is prohibited from continuing these practices and must conduct quarterly reviews of their practices to ensure no additional repossession’s in violation of the CFPA occur.  While the company stipulated to the Consent Order, it neither admitted nor denied any findings of fact or conclusions of law, except for jurisdictional purposes.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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