Hyundai has run afoul of the Consumer Financial Protection Bureau (CFPB) in what the agency says is the largest ever Fair Credit Reporting Act case against an auto servicer – one that impacted 2.2 million consumer accounts.
The agency claims that Hyundai’s use of outdated methods and systems led to repeatedly providing incorrect information to credit reporting companies about consumer payments on loans and leases that it purchased and serviced between 2016 and 2020. This resulted in some consumers being flagged for being delinquent on their loans, which lowered their credit scores and negatively affected their access to credit.
The CFPB says it is fining the company $19 million because it failed to take proper measures to address inaccurate information once the error was identified.
Tarnished credit reports
In addition to paying a fine, the agency's order requires Hyundai to do whatever is necessary to prevent this situation from happening again. Officials say $13 million of the fined amount will go to affected consumers who were inaccurately reported as delinquent on their installment plan or lease for 30 or more days.
“Hyundai illegally tarnished credit reports for millions of borrowers, including by falsely reporting them to credit reporting companies as being delinquent on their loans and leases,” said CFPB Director Rohit Chopra. “Loan servicers must be complete and accurate when furnishing information that affects a borrower’s credit report.”
ConsumerAffairs reached out to Hyundai for comment, but the company did not immediately respond.
If any consumer is having an issue with their auto loan, their credit report, or another consumer financial product or service, the agency says they can submit a complaint by filing online or calling (855) 411-CFPB (2372).
Employees who believe their company has violated federal consumer financial laws are also encouraged to send information about what they know to firstname.lastname@example.org.