CFPB details failures of credit reporting companies

ByRichard C. Sloan

May 2, 2022

The Consumer Financial Protection Bureau (CFPB) released its oversight highlights report on Monday, May 2, showing the high number of unwarranted auto foreclosures by repairers.

According to a press release from the CFPB, the report found that some repairers engaged in various unfair ways to repossess vehicles, even after consumers took action to remedy them. The report also found that some auto repairers were not getting refunds for borrowers for add-on products that no longer provided benefits, which is illegal.

Additionally, other cases have reportedly seen repairers mislead people about the amount of their final loan repayments after normal payments were postponed, often for pandemic-related reasons.

Auto-entries are usually a surprise in the way they are timed, resulting in customers losing personal property while picking up the vehicle or losing a job due to a lack of transportation – not to mention the high costs, including the need to find alternative transportation. and negative ratings on credit reports.

“While most entities act in good faith to comply with the law, CFPB reviewers identify violations of the law that result in actual harm,” CFPB Director Rohit Chopra said in the statement. “We will continue to review companies to proactively identify and mitigate harmful practices before they become widespread.”

In February, PYMNTS wrote about how the CFPB issued a compliance bulletin in an attempt to curb illegal car seizures, with the agency saying it had seen multiple illegal seizures, lazy record keeping, unreliable balance and a “ransom for personal property”.

Read more: The CFPB wants to curb illegal deposits

The report said the months leading up to February saw “extremely strong” demand for used cars, with the global chip shortage underway.

At the time, the CFPB said it was concerned these terms would make risky auto foreclosures more lucrative due to potentially high resale prices. The bureau said it was taking action against illegal seizures.

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