Santander Consumer USA Inc. reportedly did not properly disclose terms and conditions of its auto loan add-on product and auto loan extensions.
11/21/2018 8:00
The Bureau of Consumer Financial Protection and Santander Consumer USA Inc., a consumer financial services company based in Dallas, Texas, recently reached a settlement agreement for alleged violations by the company.
As described in the consent order, the bureau found that Santander violated the Consumer Financial Protection Act of 2010 by not properly describing the benefits and limitations of its S-GUARD GAP product, which it offered as an add-on to its auto loan products, according to a news release from the bureau. Santander also failed to properly disclose the impact on consumers of obtaining a loan extension, including by not clearly and prominently disclosing that the additional interest accrued during the extension period would be paid before any payments to principal when the consumer resumed making payments.
Under the terms of the consent order, Santander must, among other provisions, provide approximately $9.29 million in restitution to certain consumers who purchased the add-on product, clearly and prominently disclose the terms of its loan extensions and the add-on product, and pay a $2.5 million civil money penalty, according to the news release.
