Complaints from thousands of Toyota customers that they were duped by the automaker’s in-house financing services unit into purchasing products they couldn’t cancel resulted in a $60 million fine to settle Consumer Financial Protection Bureau charges.
Toyota Motor Credit, according to the charge, sells products that offer protection when vehicles are stolen, damaged, or require parts and service after warranties expire, typically at a cost of $700 to $2,500 per loan.
According to the agency, thousands of consumers later complained that dealers lied about whether these products were required or rushed the paperwork so they didn’t realize how much they were paying.
According to the regulators, Toyota Motor Credit then “devised a scheme to retain the revenue from these products,” making canceling the added-on bundles “extremely cumbersome,” and failing to provide refunds to consumers who did cancel. The business, according to the Consumer Financial Protection Bureau (CFPB), “falsely told consumer reporting companies that borrowers had missed payments, and it failed to correct consumer reporting errors it knew were wrong.”
Toyota has not yet publicly responded to the settlement. With nearly five million customer accounts and more than $135 billion in assets, it is one of the largest indirect auto lenders in the United States.
Toyota Motor Credit has been ordered by the CFPB to pay $48 million to harmed customers and a $12 million penalty into the CFPB’s victims relief fund.