Toyota customers have complained that they were deceived the automaker’s in-house financing services unit by buying products they couldn’t cancel, have resulted in a multimillion fine and investigation by the federal Consumer Financial Protection Bureau.
According to the charge, Toyota Motor Credit sells products, typically at a cost of $700 to $2,500 per loan, that offer protection when vehicles are stolen, damaged or require parts and service after warranties expire.
The agency said that thousands of consumers subsequently complained that dealers lied about whether these products were mandatory, or rushed the paperwork so they wouldn’t realize how much they were paying.
Toyota has not yet responded publicly to the settlement. It is among the largest indirect auto lenders in the United States, with nearly five million customer accounts and more than $135 billion in assets.
The CFPB is ordering Toyota Motor Credit to pay $48 million to harmed consumers, and pay a $12 million penalty into the CFPB’s victims relief fund.
“Toyota’s lending arm illegally withheld refunds, made borrowers run through obstacle courses to cancel unwanted services, and tarnished their credit reports,” said CFPB Director Rohit Chopra. “Given the growing burdens of auto loan payments on Americans, we will continue to pursue large auto lenders that cheat their customers.”