The auto-financing arm of carmaker Toyota agreed to pay $60 million as part of a settlement with the Consumer Financial Protection Bureau (CFPB) addressing allegations of illegal lending and credit reporting misconduct.
Toyota Motor Credit Corp. was fined $12 million and must pay nearly $48 million in consumer redress, the CFPB announced in a press release Monday.
Toyota Motor Credit was accused of making it unreasonably difficult for consumers to cancel unwanted add-ons, failing to ensure consumers received refunds for certain add-ons that had become void, failing to provide refunds to consumers who canceled their vehicle service agreements, and not timely correcting false information provided to consumer reporting agencies when consumers returned their leased vehicles, according to the CFPB’s order.
When fielding consumer complaints regarding product bundles, Toyota Motor Credit would direct the individuals to a “retention hotline” designed to dissuade cancellations, according to the CFPB. The hotline, which received more than 118,000 calls from 2016-21, would result in a dead end for consumers, as representatives would tell them they could only cancel by written request if they insisted, the agency said.
