WASHINGTON, DC – Today, the Consumer Financial Protection Bureau (CFPB) fined Hyundai Capital America (Hyundai) for repeatedly providing inaccurate information to the nation’s credit reporting companies and for failing to take appropriate measures to address them. inaccurate information if disclosed between 2016 and 2020. The CFPB found that Hyundai used outdated manuals and procedures, processes, and procedures to provide credit reporting information—which led to to the prevalence of inaccuracy—and resulting negative information placed on consumers’ credit reports through no fault of their own. In total, the CFPB found that Hyundai provided inaccurate information more than 8.7 million times on 2.2 million customer reports during that period. The order requires Hyundai to take steps to prevent future violations and to pay more than $19 million, including $13.2 million to refund affected customers who were falsely reported and $6 million in federal funds, making the CFPB the largest Fair Credit Reporting Act. case against a car service person.
“Hyundai damaged credit reports for millions of borrowers, including falsely reporting to credit reporting companies that their loans and leases were falsified,” said CFPB Director Rohit Chopra. “Their loan services must be complete and accurate when providing information that affects the borrower’s report.”
Hyundai Motor Group is a major global automobile company based in Seoul, South Korea. Its U.S. automotive subsidiary, Hyundai Capital America, sales and service contracts and leases vehicles from 1,600 Hyundai, Kia, and Genesis dealerships. As one of the largest providers of auto finance information in the US, Hyundai’s credit policies have a significant impact on credit scores. of millions of Americans. The company currently serves approximately 1.7 million customers through its commercial and leasing loans and has more than $45 billion in assets as of 2021.
The CFPB received numerous consumer complaints that Hyundai improperly reported information to credit bureaus. In its investigation, the CFPB found that Hyundai repeatedly provided inaccurate financial information about customer payments. on loans and leases purchased and serviced by Hyundai. In many cases, Hyundai knew that incorrect information was being provided and failed to take reasonable steps to correct the inaccuracy. Hyundai identified a number of issues that caused this error in its internal testing, but it took years to resolve the issues.
When Hyundai provided negative customer information, it sometimes resulted in lower credit scores and potentially affected customers’ access to credit. The CFPB concluded that Hyundai’s use of ineffective manual processes and procedures to provide customer information was inaccurate in violation of the Consumer Protection Act (CFPA).
Between January 2016 and March 2020, the CFPB also found that Hyundai violated the Financial Reporting Act (FCRA) and its implementing rule, Regulation V, by:
- Failure to fully and accurately report loan and lease information: Many times Hyundai did not take immediate steps to update and correct information provided to credit companies that they determined was incomplete or inaccurate. correct, and continue to provide this inaccurate and incomplete information.
- Failure to provide date of prior information of offense when required: FCRA requires issuers to provide credit bureaus with the date of default for payment or deposit. the collection. Hyundai failed to report a date of delinquency for many customers that exceeded 90 days.
- The inability to change or delete information if necessary: Hyundai’s inventory systems often override manual corrections made by employees in response to customer disputes. The credit system will provide monthly updates to credit reporting agencies that have reported false information after it has been disputed and corrected.
- Failing to have proper methods of identity theft: The FCRA requires lenders to respond to any information from credit reporting agencies about information provided as a result of identity theft. Hyundai has failed to establish appropriate identity theft and related security measures to respond to identity theft notifications, and continues to report information should have been blocked in the customer report.
- Lack of appropriate and fair policies and procedures: Regulation V requires providers to maintain written policies and procedures regarding the accuracy and reliability of information provided. Hyundai failed to review and update its credit reporting policies and procedures from 2010 to 2017. It was not updated until 2021. The company has some of its policies and procedures.
The CFPB was created by the Consumer Financial Protection Act, and has the authority to take action against organizations that violate consumer financial laws, including engaging in unfair, deceptive, or abusive practices. or violating the FCRA, which protects consumers from providing inaccurate information. about them. Today’s order requires Hyundai to:
- Paying $13.2 million in compensation to current and former clients: According to the CFPB, consumers about Hyundai, after determining the incorrect information, provided credit reporting companies with incorrect information that customers were 30 or more days past due. on a car rental contract or lease will receive compensation for the damage caused. .
- Pay a $6 million fine: Hyundai will pay a federal fine to the CFPB, which will be paid into the grant fund. This fund provides compensation to consumers who have been victimized by violations of federal financial protection laws.
- Take the steps to correct all incorrect information: Hyundai will review all information files currently submitted to credit companies and correct all errors and inaccuracies described in the order and send new information to credit reporting companies. Hyundai will also check its monthly maintenance reports for the errors described in the order, taking appropriate action. to identify such errors, and to correct known errors before submitting the data to any credit company.
- Identify procedures to detect and correct incorrect information: Hyundai will establish and implement written policies and procedures regarding the accuracy and reliability of customer-related information provided to a credit reporting company. Hyundai shall include special procedures for the identification and prompt correction of defects in Hyundai’s manufacturing process. Hyundai will also review current policies and procedures and implement changes to its employees’ routines to ensure they are Its employees process, analyze, investigate, and respond to all direct disputes and financial statements.
Americans have $1.4 trillion in auto loan debt, making it the third largest credit market. Of the CFPB project that the average number of car loans will increase, due to the recent shortage in the supply of motor vehicles worldwide and the result of the increase in the price of cars.
Consumers who have a problem with their auto loan, their credit report, or another financial product or service can submit a complaint to the CFPB online or by phone (855) 411-CFPB (2372). Company employees who believe their company has violated federal financial laws are encouraged to send information about what they know to firstname.lastname@example.org.
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces federal financial laws and ensures that markets for financial products are fair, transparent, and competitive. For more information, visit consumerfinance.gov.