Nissan finance arm to pay up to $5 million in fine, redress over illegal collections, repo practices

A $4 million civil money penalty and up to $1 million in consumer redress must be paid by Nissan Motor Acceptance Corporation, an auto financing subsidiary of Nissan North America, Inc., under a consent order announced Tuesday by the Consumer Financial Protection Bureau (CFPB).

The finance company, based in Irving, Texas, services auto loans and leases originated by Nissan and Infiniti dealerships nationwide. In the consent order, signed Oct. 7 by CFPB Director Kathleen Kraninger, the bureau said Nissan and its agents wrongfully repossessed vehicles; kept personal property in consumers’ repossessed vehicles until consumers paid a storage fee; deprived consumers paying by phone of the ability to select payment options with significantly lower fees; and, in its loan extension agreements, made a deceptive statement that appeared to limit consumers’ bankruptcy protections.

The bureau said these actions violated the Consumer Financial Protection Act’s (CFPA) prohibition against unfair and deceptive acts and practices.

The bureau said that:

  • From 2013 through September of 2019, the finance company (“Nissan”) repossessed hundreds of consumers’ vehicles despite the consumer having made payments or otherwise taken actions that should have prevented the repossession.
  • From at least early 2014 through late August 2017, Nissan’s repossession agents, with Nissan’s knowledge, demanded that consumers pay a separate, upfront storage fee for personal property contained in repossessed vehicles. These agents refused to return consumers’ personal property until the consumers paid the fee.
  • From 2012 through part of 2017, Nissan deprived consumers paying by phone of the ability to select pay-by-phone options with significantly lower fees. Numerous consumers paid $7.95 more to make a phone payment than they would have if they had known of and selected a different payment option.
  • When Nissan agreed to modify a consumer’s loan payments, for tens of thousands of consumers, Nissan used agreements or written confirmations that included language that created the net misimpression that consumers could not file for bankruptcy.

The consent order requires Nissan to provide up to $1 million of cash redress to consumers subject to a wrongful repossession, credit any outstanding account charges associated with a wrongful repossession, and to pay a civil money penalty of $4 million. It also imposes certain requirements to prevent future violations and remediate consumers whose vehicles are wrongfully repossessed going forward.

Specifically, the order requires Nissan to prohibit its repossession agents from charging personal property fees to consumers directly and from demanding fees as a condition of returning personal property; to correct its repossession practices and conduct a quarterly review to discover and remediate any future wrongful repossessions; to clearly disclose to consumers the fee for each method of making a payment by phone before consumers are asked which method they wish to use; and to stop using any language that creates the impression that consumers have surrendered their bankruptcy rights.

Consumer Financial Protection Bureau Settles with Nissan Motor Acceptance Corporation for Illegal Collections and Repossession Practices