Toyota Motor Credit Ordered to Pay $60 Million Penalty for Unfair Practices
Introduction
In a recent ruling, Toyota Motor Credit has been fined $12 million and ordered to pay $48 million in restitution after a court found the company guilty of engaging in unfair practices. The Consumer Financial Protection Bureau (CFPB) accused the organization of pushing “product bundles” that were difficult to cancel, resulting in higher monthly payments for customers.
The Allegations
The CFPB alleges that Toyota Motor Credit used deceptive tactics to sell these product bundles, making it nearly impossible for customers to cancel them once they were approved. Many customers complained about being forced to purchase these bundles and accused dealers of rushing through paperwork to hide the true costs. The court found thousands of such complaints, indicating a widespread issue.
Toyota Motor Credit’s Role
While dealers were blamed for their role in this scheme, Toyota Motor Credit was also found responsible for making the cancellation process excessively difficult. The company allegedly directed callers to agents who discouraged cancellations and failed to provide refunds in some cases. The consent order requires Toyota Motor Credit to simplify the cancellation process and closely monitor its dealers’ conduct.
Settlement and Response
Although Toyota Motor Credit did not admit or deny liability, the company agreed to settle the case. In a statement, they claimed that they “admitted to no wrongdoing but agreed to the terms of the consent order with the Consumer Financial Protection Bureau to fulfill our commitment to continually provide ever-better service to our customers.”
Conclusion
This ruling serves as a reminder that dealers and their financial arms must adhere to fair practices. Toyota Motor Credit has been penalized for their role in pushing unfair product bundles and making it difficult for customers to cancel them. The company is now required to simplify the cancellation process and monitor its dealers more closely to prevent similar issues in the future.
[Image: Toyota]
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