Toyota Motor Credit Corporation (TMCC) has agreed to a $60 million settlement ordered by the Consumer Financial Protection Bureau (CFPB). The lending arm of Toyota was accused of illegally preventing consumers from canceling various bundled products often included in vehicle purchases. The federal agency also states false reports were made to credit companies that negatively affected buyers’ credit reports.<\/p>\n
According to a press release from the CFPB, consumers complaining about unwanted products were often funneled to internal customer service teams where the process of getting them removed or refunded was unnecessarily difficult. The types of products aren’t mentioned, but CFPB states that added costs were between $750 and $2,500 per auto loan. In some cases, Toyota dealerships allegedly lied to customers about these products being mandatory, and refunds that were issued were sometimes not for the full amount. A total of 118,000 customers called a “dead-end cancellation hotline” between 2016 and 2021, according to CFPB.<\/p>\n
“Toyota’s lending arm illegally withheld refunds, made borrowers run through obstacle courses to cancel unwanted services, and tarnished their credit reports,” said CFPB Director Rohit Chopra. “Given the growing burdens of auto loan payments on Americans, we will continue to pursue large auto lenders that cheat their customers.”<\/p>\n
On the credit front, CFPB’s announcement states that TMCC falsely reported some accounts as delinquent to credit agencies despite customers having returned lease vehicles. Moreover, TMCC didn’t correct such errors in a prompt fashion. According to Reuters<\/em>, 27,500 TMC customers had incorrect data on their reports as a result, lowering their credit scores.<\/p>\n In a statement to Motor1<\/em>, Toyota admits no wrongdoing but agrees to the terms of the settlement.<\/p>\n