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.
Become a TTAC insider. Get the latest news, features, TTAC takes, and everything else that gets to the truth about cars first by subscribing to our newsletter.
Matthew buys, sells, fixes, & races cars. As a human index of auto & auction knowledge, he is fond of making money and offering loud opinions.
More by Matthew Guy
Latest Car ReviewsRead more
Latest Product ReviewsRead more
- Charles When I lived in Los Angeles I saw a 9-5 a few times and instanly admired the sweeping low slug aerodynamic jet tech influenced lines and all that beautiful glass. The car was very different from what I expected from a Saab even though the 900 Turbo was nice. A casual lady friend had a Saab Sonnet, never drove or rode in it but nonetheless chilled my enthusiasm and I eventually forgot about Saabs. In the following years I have had seven Mercedes's, three or four Jaguars even two Daimlers both the 250 V-8 and the massive and powerful Majestic Major. Daily drivers of a brand new 300ZX 2+2 and Lincolns, plus a few diesel trucks. Having moved to my big farm in central New York, trucks and SUV's are the standard, even though I have a Mercedes S500 in one of my barns. Due to circumstances with my Ford Explorer and needing a second driver I found the 2006 9-5 locally. Very little surface rust, none undercarriage, original owner, garage kept, wife driver and all the original literature and a ton of paid receipts and history. The car just turned 200,000 miles and I love it. Feels new like I'm back in my Nissan 300ZX with a lot more European class and ready power with the awesome turbo. So fun to drive, the smooth power and torque is incredible! Great price paid to justify going through the car and giving her everything she needs, i.e., new tires, battery, all shocks, struts, control arms, timing chain and rust removable to come, plus more. The problem now is I want to restore it and likely put it in my concrete barn and only drive in good weather. As to the writer, Alex Dykes, I take great exception calling the 9-5 Saab "ugly," finding myself looking back at her beauty and uniqueness. Moreover, I get new looks from others not quite recognizing, like the days out west with my more expensive European cars. There are Saabs eclipsing 300K rourinely and one at a million miles and I believe one car with 500K on the original engine. So clearly, this is a keeper, in love already with my SportCombi. I want to be in that elite club.
- Marky S. I own the same C.C. XSE Hybrid AWD as in this article, but in Barcelona Red with the black roof. I love my car for its size, packaging, and the fact that it offers both AWD and Hybrid technology together. Visibility is impressive, as is its small turning circle. I consider the C.C. more of a "station wagon" by proportion, rather than an “SUV.” It is fun to drive, with zippy response and perky pick-up. It is a pleasant car to drive and ride in. It is not trying to be a “Butch Off-Roader”, or a cosseting “Luxury Cruiser.” Those are not its goals or purpose. The Corolla Cross XSE Hybrid AWD is a wonderful All-Purpose Car (O.K. – “SUV” if you must hear me say it!) with a combination of all the features it has at a reasonable price.
- Ernesto Perez There's a line in the movie Armageddon where Bruce Willis says " is this the best idea NASA came up with?". Don't quote me. I'm asking is this the best idea NY came up with? What's next? Charging pedestrians to walk in certain parts of the city? Every year the price for everything gets more expensive and most of the services we pay for gets worse. Obviously more money is not the solution. What we need are better ideas, strategies and inventions. You want to charge drivers in the city - then put tolls on the free bridges like the Brooklyn, Manhattan and Williamsburg bridges. There's always a better way or product. It's just the idiots on top think they know best.
- Carsofchaos The bike lanes aren't even close to carrying "more than the car lanes replaced". You clearly don't drive in Midtown Manhattan on a daily like I do.
- Carsofchaos The problem with congestion, dear friends, is not the cars per se. I drive into the city daily and the problem is this:Your average street in the area used to be 4 lanes. Now it is a bus lane, a bike lane (now you're down to two lanes), then you have delivery trucks double parking, along with the Uber and Lyft drivers also double parking. So your 4 lane avenue is now a 1.5 lane avenue. Do you now see the problem? Congestion pricing will fix none of these things....what it WILL do is fund persion plans.