CFPB Orders Toyota to Pay $60 Million Over Lending Practices
21 November 2023 - 2:06AM
Dow Jones News
By Dean Seal
Federal regulators have ordered Toyota Motor's auto-lending arm
to pay $60 million in fines and consumer redress for allegedly
preventing borrowers from canceling product bundles that raised
their monthly loan payments.
The U.S. Consumer Financial Protection Bureau said Monday that
Toyota Motor Credit Corporation has violated federal law by
withholding refunds or refunding incorrect amounts on bundled
products, unduly hurting consumers' credit reports.
The Toyota unit neither admits nor denies the agency's findings
but consents to the entry of the CFPB's order, which requires it to
pay $48 million to affected customers and a $12 million
penalty.
A representative for Toyota didn't immediately respond to a
request for comment.
According to the CFPB, the Toyota financing unit offers optional
products and services that can be bundled into packages and added
to car loan contracts. Including those products can significantly
increase the size of a loan, monthly payment or finance charge.
The agency alleges that Toyota Motor Credit made it extremely
difficult to cancel those bundled products and services, and then
failed to properly provide refunds for consumers who were able to
cancel. The unit also lied to consumer reporting companies about
borrowers missing payments, the CFPB said.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
November 20, 2023 09:51 ET (14:51 GMT)
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