An auto finance company and its subsidiary have been ordered to pay $44 million in refunds and balance reductions to consumers, as well as a $4 million fine.
The Consumer Financial Protection Bureau (CFPB) said that Westlake Services, LLC and Wilshire Consumer Credit, LLC deceived consumers by calling under false pretenses and using phony caller ID information. The CFPB said the companies falsely threatened to refer borrowers for investigation or criminal prosecution and illegally disclosed information about debts to borrowers’ employers, friends, and family.
“There’s no excuse for lying to your customers, and today’s action will provide millions of dollars in relief for borrowers caught up in Westlake and Wilshire’s deception,” said CFPB Director Richard Cordray. “Consumers struggling to pay their bills deserve to be treated with respect, not subjected to illegal threats and deceptive phone calls."
The company's policies haven't won it many friends among its customers, judging from the mostly negative reviews on leading review sites.
"I've never dealt with such horrible customer service. These people are the most disgusting rude people I've ever had any encounters with," said a Rahway, N.J., consumer who posted a ConsumerAffairs review about Westlake. "They harass you, call from blocked numbers, to extent of even threatening you that your call will be repossessed! Stay away from them."
Even paying off a loan turned into a hassle, Ed of Funkstown, Md., said.
"Was told our vehicle payoff balance was 2,104.00 on Feb 20th which I paid in full that day. Then on Feb 23 we got a statement from them and have stating our balance was $1,129.70. I called customer service and they said I was only due a refund of 174.00, I stated no I am due 974.30 and I then was told I would have to speak to a manager," Ed said. "[I] called this manager numerous times until her voice email was full about my refund, its has now been a month. I finally talked to someone in customer service that got her directly on the phone for me."
Westlake is an indirect auto finance company based in Los Angeles that specializes in purchasing and servicing auto loans, including many subprime and near-subprime loans. Wilshire Consumer Credit offers auto title loans directly to consumers, largely via the Internet, and services those loans. Wilshire also purchases and services auto title loans made by others.
The CFPB found that Westlake and Wilshire deceived borrowers into thinking they were being called by repossession companies, other third parties, or even the borrowers’ own family and friends.
The CFPB’s investigation found that the companies’ debt collectors used a web-based service, Skip Tracy, to place outgoing calls and choose the phone number and caller ID text that the call recipient would see. Since January 2010, Westlake and Wilshire debt collectors have used Skip Tracy to place or receive calls associated with over 137,000 loan accounts.
The Bureau also found that the companies unlawfully disclosed information about borrowers’ debts to employers, family, and friends. They also failed to disclose the annual percentage rate on certain loans as required by law. In some cases, the companies changed the due dates or extended the terms of loans without borrowers’ permission, causing more interest to accrue, while telling consumers that the extensions would have a positive effect.