Bad data provided to consumer reporting agencies results in bad outcome for Santander Consumer: $4.75M penalty

Providing erroneous consumer loan data to consumer reporting agencies over years at a time has earned a U.S. subsidiary of a Spanish bank a consent order from the federal consumer financial protection agency, which imposes a civil money penalty of $4.75 million.

In a release Tuesday, the Consumer Financial Protection Bureau (CFPB) said it had settled with, and issued the consent order to, Santander Consumer USA Inc., a Fort Worth, Texas-based subsidiary of a subsidiary of Banco Santander S.A. in Spain. CFPB said the Texas subsidiary is a “leading originator” and servicer of nonprime auto loans and leases (reporting, in 2019, $31.3 billion in originations across vehicle retail installment contracts and leases, and $994 million in net income).

Santander Consumer, the CFPB said, furnishes credit information on the auto loans it services by sending monthly data files to consumer reporting agencies (CRAs).

“The Bureau found that the consumer loan data Santander furnished to CRAs between January 2016 and August 2019 contained many systemic errors that in many instances, could have negatively impacted consumers’ credit scores and access to credit,” the bureau stated.

The release noted that the consent order requires Santander Consumer to take certain steps to prevent future violations and imposes a $4.75 million civil money penalty.

In addition the fine, the agency said, Santander Consumer must also correct all inaccuracies and errors that the bureau identified and take certain steps to improve and ensure the accuracy of the consumer information it provides to CRAs. That includes conducting monthly reviews of account information to assess the accuracy and integrity of information Santander Consumer furnishes.

The company must also establish and implement reasonable policies and procedures regarding the accuracy and integrity of information it furnishes to CRAs. 

Consumer Financial Protection Bureau Settles with Santander Consumer USA Inc. for Credit Reporting Violations in Connection with Its Auto Loans

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