A fine of $19 million has been ordered against a Korean auto manufacturer-owned finance company for “repeatedly providing inaccurate information to nationwide credit reporting companies” and failing to address the bad information once it was identified, the federal consumer financial protection agency said Tuesday.
The Consumer Financial Protection Bureau (CFPB) said the fine assessed against Hyundai Capital America for furnishing the incorrect information was also for wrongly reporting that consumers were delinquent on loans or leases. All told, the agency said, inaccurate information was provided in more than 8.7 million instances on more than 2.2 million consumer accounts between 2016 and 2020.
The bureau said it found that Hyundai used manual and outdated systems, processes, and procedures to furnish credit reporting information—which led to widespread inaccuracies—and resulted in negative inaccurate information being placed on consumers’ credit reports through no fault of their own.
“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 agency said.
Bureau Director Rohit Chopra charged that the actions taken by Hyundai were illegal and “tarnished credit reports for millions of borrowers, including by falsely reporting them to credit reporting companies as being delinquent on their loans and leases.”
The agency said it had received “many consumer complaints” that the company inaccurately reported account information to credit reporting companies. The CFPB said its investigation found that Hyundai repeatedly provided inaccurate credit report information about consumer payments on loans and leases that Hyundai purchased and serviced.
“In many cases, Hyundai knew it was providing inaccurate information and failed to take reasonable measures to address the inaccuracies. Hyundai identified many of the issues causing these inaccuracies in its internal audits, but still took years to address the problems,” the bureau said.