CFPB Issues Record Fine for Auto Servicer’s FCRA Violations

enforcement actionThe enforcement action against Hyundai focused on reports that the company furnished inaccurate information to credit reporting agencies.

08/03/2022 2:30 P.M.

2 minute read

The Consumer Financial Protection Bureau has filed a consent order against Hyundai Capital America “for repeatedly providing inaccurate information to nationwide credit reporting companies and failing to take proper measures to address inaccurate information once it was identified between 2016 and 2020,” according to a news release from the bureau.

In total, the CFPB found that Hyundai furnished inaccurate information in more than 8.7 million instances on more than 2.2 million consumer accounts during that period, according to the news release.

The order requires Hyundai to take steps to prevent future violations and to pay more than $19 million, including $13.2 million in redress to affected consumers who were inaccurately reported as delinquent and a $6 million civil money penalty, making this the CFPB’s largest Fair Credit Reporting Act case against an auto servicer, the bureau reports.

The CFPB concluded that Hyundai’s use of ineffective manual processes and systems to furnish consumer information was a violation of the Consumer Financial Protection Act.

Between January 2016 and March 2020, the CFPB also found Hyundai violated the FCRA and its implementing regulation, Regulation V, by:

  • Failing to report complete and accurate loan and lease account information.
  • Failing to provide date of first delinquency information when required.
  • Failing to modify or delete information when required.
  • Failing to have reasonable identity theft procedures.
  • Failing to have reasonable accuracy and integrity policies and procedures.

Enforcement Action

Under the consent order, Hyundai will review all account files that it currently furnishes to credit reporting agencies (CRAs) and correct all inaccuracies and errors described in the order and send updated information to CRAs. Hyundai will also examine its monthly furnishing data processes for the errors described in the order, take reasonable steps to identify such errors, and resolve identified errors before providing the data to any credit reporting company.

Hyundai will establish and implement written policies and procedures regarding the accuracy and integrity of the information relating to consumers that it furnishes to a CRA. Hyundai must specifically include processes for identifying and promptly correcting systemic errors in their credit report furnishing system. Hyundai will also examine current policies and procedures and implement changes to the practices of its employees to ensure that its employees properly route, categorize, investigate, and respond to all direct and indirect credit reporting disputes.

In a statement quoted by Reuters, Hyundai Capital America said it has launched an “end-to-end review” of its credit reporting, and was committed to giving customers “timely, accurate, high-quality service and care.”

Read the complete consent order here.

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