NMAC Pays $5M In CFPB Consent Order; Third-Party ‘Deprived’ Consumers of Lower Pay-by-Phone Options

The Consumer Financial Protection Bureau yesterday announced it had entered into a consent order with Nissan Motor Acceptance Corp., which will require the auto lender to repay consumers $1 million and pay a $4 million fine after it was accused of wrongfully repossessing vehicles and because its third-party payment processor did not inform consumers who were paying their bills via phone calls that there were other — less expensive — payment options available to them.

A copy of the consent order can be accessed by clicking here.

The lender was also accused, via the repossession agents it hired, of keeping personal property that was in vehicles that were repossessed and not returning it until a storage fee was paid, and making deceptive statements in agreements to extend auto loan terms that made it appear as though the consumers would be prevented from filing bankruptcy protection.

NMAC was accused of repossessing hundreds of vehicles even though the consumers had made payments to decrease their delinquency to less than 60 days past due or kept a promise to pay, even though the lender said it would not repossess vehicles if either of those actions were were undertaken by the consumer.

Through a third-party payment processor, NMAC accepted payments over the phone from consumers. The payment processor charged a $5 fee if the consumer paid via electronic check or in-network debit card or $12.95 if the consumer paid with a credit card or out-of-network debit card payments. When the consumer elected to pay using a credit card or out-of-network debit card, he or she was not notified of the difference in fees if the consumer chose the electronic check or in-network debit card option.

The CFPB held NMAC responsible for the actions of the third-party payment processor.

“NMAC denies any wrongdoing but has agreed to settle with the CFPB in the best interest for all parties,” said Nissan spokesman Dan Passe, in a statement. “While NMAC disagrees with the CFPB’s claims, we take their assertions seriously and share their commitment to fair practices for all our customers.”

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