According to media reports, the Consumer Financial Protection Bureau (CFPB) has charged Toyota’s financial unit – Toyota Motor Credit, with $60 million in fines and restitution.<\/p>\n
The CFPB stated that Toyota Motor Credit forced customers into buying expensive product bundles, that they may not have actually wanted – resulting in higher monthly car loan payments. The carmaker’s in-house financing unit reportedly had a habit of offering products typically costing between $700 to $2500 per loan. These products offer protection if a vehicle is stolen, damaged, or needs parts after the warranty expires.<\/p>\n
Customers using Toyota Motor Credit complained to CFPB that dealers either lied to them, stating that the bundle was mandatory or rushed paperwork, preventing them from realizing how much they were actually paying. The financing unit is said to be the largest indirect auto lender in the US, with nearly 5 million customer accounts and over $135 billion in assets. Toyota Motor Credit would also fail to either cancel the bundles or not provide refunds to customers who did manage to cancel them. The financing unit reportedly also falsely tarnished the credit reports of borrowers claiming they missed car payments, even though they hadn’t.<\/p>\n
Rohit Chopra, CFPB, stated, “Given the growing burdens of auto loan payments on Americans, we will continue to pursue large auto lenders that cheat their customers.”<\/p>\n