Thrifty Banker
  • Politics
  • Business
  • World
  • Investing
  • Politics
  • Business
  • World
  • Investing

Thrifty Banker

Business

Toyota’s credit business is fined $60M for saddling customers with overloaded loans

by November 22, 2023
November 22, 2023
Toyota’s credit business is fined $60M for saddling customers with overloaded loans

The Consumer Financial Protection Bureau on Monday ordered Toyota’s credit arm to pay $60 million for tricking customers into unnecessary products that it then made unreasonably hard to cancel.

The agency said thousands of borrowers complained that Toyota Motor Credit employees had added extra products to their loans, racking up fees for the company at consumers’ expense. It then made it unreasonably hard for consumers to cancel those services.

Toyota Motor Credit is based in Plano, Texas, and it provides financing for people buying cars through Toyota dealerships.

The company admitted no wrongdoing as part of the settlement.

The CFPB said the company will pay $32 million to consumers who did not receive refunds they were owed; $9.9 million to consumers who tried to cancel their policies but were unable to do so; $6 million to consumers who were harmed by false information sent to a consumer reporting company; and $52,000 for those who were given inaccurate refunds. Toyota’s finance arm will also pay a $12 million penalty to the agency’s victim relief fund.

In one example, the CFPB said Toyota Motor Credit told customers that if they wanted to cancel extra products bundled into their car loans, they should call a hotline that had been set up to frustrate them. Employees who answered the phone were told to continue promoting the products until the customer asked them to cancel three times. At that point, the employee was supposed to say that the only way to cancel was to file a written request.

More than 118,000 customers called that hotline from 2016 to 2021 alone.

In addition to paying the fines and restitution, the agency said Toyota Motor Credit will also be required to make it easy for consumers to cancel unwanted coverage, inform consumers that they can cancel the products online or in writing, and monitor dealers to make sure they don’t add products to customer loans without the borrower’s consent. The company will also be prohibited from tying employee compensation or performance metrics to consumer retention of bundled products such as the ones at issue in the case.

The agency said the unnecessary products included Guaranteed Asset Protection, a type of insurance that covers the difference between the amount a consumer owes on their auto loan and what their insurance pays if the vehicle is stolen, damaged or totaled; Credit Life and Accidental Health coverage, which covers the remaining balance on the loan if the borrower dies or becomes disabled; and vehicle service agreements, which reimburse borrowers for parts and service beyond what is covered by the manufacturer’s warranty.

The CFPB said those products averaged $700 to $2,500 per loan.

The agency also said the company knowingly gave false information to ratings agencies, hurting their customers’ credit scores by telling the reporting companies the consumers were missing their payments when they had actually returned the vehicles they had leased.

This post appeared first on NBC NEWS
0
FacebookTwitterGoogle +Pinterest
previous post
Premature, sick babies receiving treatment in Egypt after Al-Shifa evacuation
next post
UAW autoworkers officially ratified new contract, union says

Related Posts

Inflation is down, but a return to ‘normal’...

August 10, 2023

Thousands of autoworkers at Toyota, Honda and others...

December 1, 2023

JPMorgan Chase posts record profit as the bank’s...

January 17, 2025

Why it seems like everyone you know is...

May 29, 2024

The great American jobs machine keeps revving in...

February 3, 2024

Nvidia CEO Jensen Huang warns China is ‘not...

May 1, 2025

Extreme heat set to drive home cooling costs...

June 4, 2024

Inflation pressure lingering from pandemic is keeping Fed...

May 30, 2024

Ford recalling about 2 million Explorers over fears...

January 26, 2024

Trump tariffs, tax cuts and interest rates likely...

May 2, 2024

    Sign up for our newsletter to receive the latest insights, updates, and exclusive content straight to your inbox! Whether it's industry news, expert advice, or inspiring stories, we bring you valuable information that you won't find anywhere else. Stay connected with us!


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Popular

    • 1

      Top 10 Countries for Natural Gas Production (Updated 2024)

      April 6, 2024
    • 2

      Understanding Lithium Mineralogy from an Investment Perspective

      September 12, 2023
    • 3

      US Capital Global Facilitates $50MM Financing to Accelerate Charbone Hydrogen’s North American Expansion

      June 6, 2025
    • 4

      Israel confirms it is arming Hamas rivals in operation opposition calls ‘complete madness’

      June 6, 2025
    • 5

      A GOP operative accused a monastery of voter fraud. Nuns fought back.

      January 3, 2025
    • 6

      Crypto Market Recap: Strategy Eyes US$1B Raise for Bitcoin Push, UK Regulator Reverses ETN Ban

      June 6, 2025
    • 7

      China’s aircraft carriers send message in the open Pacific for the first time – and bigger and more powerful ships are coming

      June 16, 2025

    Categories

    • Business (1,053)
    • Investing (2,079)
    • Politics (2,977)
    • Uncategorized (20)
    • World (3,387)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: thriftybanker.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 thriftybanker.com | All Rights Reserved