Toyota lender accused of car payment, credit reporting misconduct scheme
Toyota Motor Credit Corporation has been ordered to pay $60 million for allegedly “operating an illegal scheme to prevent borrowers from cancelling product bundles that increased their monthly car loan payments.”
“…We will continue to enhance our practices to deliver the best possible customer experiences.”
— Jason Stoogenke (@action9) November 20, 2023
In a news release, the Consumer Financial Protection Bureau said Toyota Motor Credit, which is Toyota’s auto-financing branch, didn’t issue refunds or incorrectly refunded the product bundles. That false information negatively affected customers’ credit reports.
The lender is also accused of sending its customers to a cancellation hotline that was designed to convince them not to cancel.
Customers said they were led to believe the bundle was mandatory, and some said it was it was included in their contracts without their knowledge.
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“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.”
The bureau ordered Toyota Motor Credit to pay $48 million to its affected customers and $12 million to the Consumer Financial Protection Bureau’s victim relief fund.
Toyota Motor Credit shared a statement in response to the order, saying it never admitted to any of the alleged misconduct. Read the full statement below:
“Toyota Motor Credit Corporation (TMCC) is committed to doing what’s right for our customers and strives to consistently follow all federal and state laws in our sales, customer service, and administrative practices. We are dedicated to ensuring we demonstrate our core value of “Respect for People” in every aspect of our relationship with customers. TMCC admitted to no wrongdoing but agreed to the terms of the consent order with the Consumer Financial Protection Bureau (CFPB) 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. We will continue to enhance our practices to deliver the best possible customer experiences.”
Toyota Motor Credit Corporation is one of the country’s largest indirect auto lenders.
(WATCH BELOW: Transunion consumers wait for payments)
