Toyota Financial Ordered to Pay $60M Penalty
In yet another chapter of dealers (and their financial arms) behaving badly, Toyota Motor Credit has been levied $12 million civil fine and also order to fork over $48 million in restitution after a court found the organization played fast and loose with some rules.
At issue were items described by the court as “product bundles” which the Consumer Financial Protection Bureau alleges were nigh-impossible to cancel once pushed through the approval process. This, they say, drove up monthly payments of hapless customers. Anyone who’s been plunked into the business office of a dealership knows exactly the types of bundles to which the CFPB is alluding.
Interestingly, the company apparently did not admit or deny liability whilst agreeing to settle the case. A number – thousands, according to the regular – of customers seemingly complained about being saddled with these add-on bundles, alleging shadiness at the dealer level about if these packages were mandatory or the rushing of paperwork in apparent attempts to obfuscate true costs.
But the dealers aren’t all to blame, it seems. The regulator goes on to say that Toyota Motor Credit went out of its way to making the reversal of these charges “extremely cumbersome”, including the practice of routing callers to agents instructed to discourage cancellations. In some cases, refunds are alleged to not have been given at all – whether due to requests falling through the cracks, someone losing paperwork, or willful maliciousness is unclear.
According to reports, the consent order instructs Toyota Motor Credit to simplify the process for cancelling unwanted product bundles whilst also agreeing to monitor the conduct of its dealer body more closely. As well, it is suggested they also copped to ensuring employee pay and performance metrics are not tied to sales of these bundles but anyone with even a passing knowledge of dealer management techniques know that decree is all but impossible to enforce. In a statement, Toyota Motor Credit said it "admitted to no wrongdoing but agreed to the terms of the consent order with the Consumer Financial Protection Bureau to fulfill our commitment to continually provide ever-better service to our customers.”
And your kid promises to do their homework on time, as well.
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