{"id":35964,"date":"2023-11-20T19:49:24","date_gmt":"2023-11-20T19:49:24","guid":{"rendered":"https:\/\/isafespend.com\/news\/toyota-financing-arm-fined-60-million-by-consumer-watchdog-for-car-loan-scam\/"},"modified":"2023-11-20T19:49:26","modified_gmt":"2023-11-20T19:49:26","slug":"toyota-financing-arm-fined-60-million-by-consumer-watchdog-for-car-loan-scam","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=35964","title":{"rendered":"Toyota financing arm fined $60 million by consumer watchdog for car loan scam"},"content":{"rendered":"<div id=\"RegularArticle-ArticleBody-6\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-6-2\"><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"><\/span><\/p>\n<div class=\"group\">\n<p>WASHINGTON \u2014 The U.S. financing arm for <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-1\">Toyota<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> was fined\u00a0$60 million\u00a0Monday by a federal consumer regulator for preventing car buyers from canceling add-ons to their loans.<\/p>\n<p>&#8220;Toyota&#8217;s lending arm illegally withheld refunds, made borrowers run through obstacle courses to cancel unwanted services, and tarnished their credit reports,&#8221; said Consumer Financial Protection Bureau Director Rohit Chopra.<\/p>\n<p>Toyota Motor Credit Corp., or TMCC, violated the Consumer Financial Protection Act by preventing customers from canceling loan add-ons that cost on average between $700 and $2,500 per loan, according to a consent order. It also failed to ensure refunds for voided services.<\/p>\n<p>TMCC is &#8220;one of the largest indirect auto lenders in the country,&#8221; the\u00a0CFPB\u00a0noted in a statement on the fine.<\/p>\n<p>TMCC is ordered to pay $48 million in consumer redress and a $12 million civil money penalty to the CFPB&#8217;s victims relief fund.\u00a0The order also prohibits incentives for employees to sell add-on products.<\/p>\n<p>&#8220;Given the growing burdens of auto loan payments on Americans, we will continue to pursue large auto lenders that cheat their customers,&#8221; Chopra said.<\/p>\n<p>The company &#8220;admitted no wrongdoing but agreed to the terms of the consent order with the Consumer Financial Protection Bureau to fulfill our commitment to continually provide ever-better service to our customers,&#8221; Vincent Bray, senior manager of corporate communications for Toyota Financial Services, told CNBC.<\/p>\n<\/div>\n<div class=\"group\">\n<div class=\"RelatedContent-relatedContent\" id=\"RegularArticle-RelatedContent-1\">\n<div class=\"RelatedContent-container\">\n<div class=\"RelatedContent-nonCollapsibleContent\">\n<h2 class=\"RelatedContent-header\">Read more CNBC politics coverage<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Between 2016 and 2021, more than 118,000 consumer calls to cancel add-on services were directed to a &#8220;retention hotline&#8221; where, after efforts to dissuade cancelations, consumers were told that only written requests would be honored, the CFPB found.<\/p>\n<p>Examples of add-ons include Guarantee Asset Protection, or GAP, to cover the difference between what is owed and what insurance pays in the event of a vehicle accident or theft; Credit Life and Accidental Health (CLAH) to cover a remaining loan balance if the owner dies or becomes disabled; and vehicle service agreements to reimburse for unwarrantied parts and services.<\/p>\n<p>TMCC did not refund prepaid GAP and CLAH premiums to customers who paid off loans or ended leases before the contracts ended, according to a release. It also miscalculated refunds for consumers who canceled their vehicle service agreements.<\/p>\n<p>The firm was also found to have violated the Fair Credit Reporting Act, which protects information provided on consumer reports, by failing to promptly correct inaccurate information it gave to credit reporting agencies about delinquent returns of leased vehicles, according to the order.<\/p>\n<p>&#8220;In most instances, TMCC has already addressed the areas of concern cited by the Bureau,&#8221; said Bray, the Toyota spokesman. &#8220;We will continue to enhance our practices to deliver the best possible customer experiences.&#8221;<\/p>\n<p><em><strong>Don&#8217;t miss these stories from CNBC PRO:<\/strong><\/em><\/p>\n<\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.cnbc.com\/2023\/11\/20\/cfpb-fines-toyota-financing-arm-for-60-million-for-car-loan-scam.html\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>WASHINGTON \u2014 The U.S. financing arm for Toyota was fined\u00a0$60 million\u00a0Monday by a federal consumer regulator for preventing car buyers from canceling add-ons to their loans. &#8220;Toyota&#8217;s lending arm illegally withheld refunds, made borrowers run through obstacle courses to cancel unwanted services, and tarnished their credit reports,&#8221; said Consumer Financial Protection Bureau Director Rohit Chopra.<\/p>\n","protected":false},"author":1,"featured_media":35965,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[43],"tags":[],"class_list":{"0":"post-35964","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.12 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Toyota financing arm fined $60 million by consumer watchdog for car loan scam | 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