CFPB Orders Toyota to Pay $60 Million Over Lending Practices -- Update
November 20 2023 - 10:36AM
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 Corp. 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 Motor Credit said in a statement
that it has admitted no wrongdoing but agreed to the consent order
to "fulfill our commitment to continually provide ever-better
service to our customers."
"In most instances, TMCC has already addressed the areas of
concern cited by the bureau," the statement said.
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 allegedly 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 10:21 ET (15:21 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
Toyota Motor (NYSE:TM)
Historical Stock Chart
From Jun 2024 to Jul 2024
Toyota Motor (NYSE:TM)
Historical Stock Chart
From Jul 2023 to Jul 2024