Lender to Pay $19M for ‘Widespread’ Credit Reporting ‘Failures’

The Consumer Financial Protection Bureau yesterday announced a consent order with Hyundai Capital America, the financing arm of Hyundai Motors, in which the company will pay $19 million in restitution and fines after being accused of reporting inaccurate information to the credit reporting agencies on more than 2 million of its customers.

A copy of the consent order can be accessed by clicking here. A copy of the stipulation and consent to the issuance of the consent order can be accessed by clicking here.

Between 2016 and 2020, Hyundai allegedly violated the Fair Credit Reporting Act by furnishing inaccurate information nearly 9 million instances, including failing to report complete and accurate loan and lease information, providing the date of first delinquency, failing to delete information when required, failing to have reasonable procedures for dealing with instances of identity theft, and failing to update its credit reporting policies and procedures for seven years. In some situations, after a consumer disputed the information being furnished by Hyundai, the company manually updated the tradeline to reflect accurate information, only to have its “deficient” systems override the corrections and return to reporting the inaccurate data.

The company has agreed to pay $13 million in compensation to current and former customers and $6 million in fines. The customers will receive refunds if Hyundai furnished inaccurate information about them being 30 days or more past due.

“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 in a statement. “Loan servicers must be complete and accurate when furnishing information that affects a borrower’s credit report.”

An investigation was launched after “many” consumers filed complaints with the CFPB about inaccurate information being reported on their credit reports, according to the Bureau.

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