Torrance, California — Toyota Motor Corp’s U.S.-based auto financing unit will pay $60 million in fines and restitution to settle a U.S. regulator’s charges that it illegally prevented borrowers from cancelling product bundles that increased their monthly car loan payments.
On Monday, the Consumer Financial Protection Bureau (CFPB) said Toyota Motor Credit will pay a $12 million civil fine and a $48 million fine to harmed consumers for claims made to the CFPB over misinformation made by Toyota dealerships to consumers.
Toyota Motor Credit offers financing for people who buy vehicles at Toyota dealerships and also offer products (valued at approximately $700 to $2,500 in loans) for protection when vehicles are stolen or damaged, or require parts and services after warranties have expired.
According to the CFPB, thousands of consumers complained to Toyota Motor Credit about not being clearly made aware if certain products were mandatory to their vehicles as well as for rushed paperwork, and misinformation surrounding consumer payments.
The regulator involved in this lawsuit said Toyota Motor Credit then made it “extremely cumbersome” to cancel product bundles and failed to provide refunds to customers who tried to cancel which in many cases, affected their credit rates.
As of the time of reporting, Toyota has not admitted or denied liability in its agreement to the settlement.