The Consumer Financial Protection Bureau (CFPB) released its Supervisory Highlights report Monday (May 2), showing the high amount of wrongful auto repossessions by servicers.
According to a CFPB press release, the report found that some servicers have engaged in various unfair ways of repossessing vehicles, even after consumers took action to remedy things. The report also found that some auto servicers were not obtaining refunds for borrowers for add-on products which didn’t provide a benefit anymore, which is illegal.
Additionally, other cases reportedly saw the servicers misleading people about how much their final loan payments were after the normal payments had been deferred, oftentimes for pandemic-related reasons.
Auto repossessions are usually a surprise in the way they’re timed, resulting in customers losing personal property while the vehicle is taken or losing a job because of a lack of transportation — not to mention the heavy costs, including the need to find alternate transportation and negative marks on credit reports.
“While most entities act in good faith to follow the law, CFPB examiners are identifying law violations that lead to real harm,” CFPB Director Rohit Chopra said in the release. “We will continue to examine firms to proactively identify and mitigate harmful practices before they become widespread.”
In February, PYMNTS wrote about how the CFPB issued a compliance bulletin to try and curb illegal car repossessions, with the agency saying it had seen several illegal seizures, lazy record keeping, unreliable balance statements and “ransom for personal property.”
Read more: CFPB Wants to Put Brakes on Illegal Repos
The report said the months leading up to February had “extremely strong” demand for used cars, with the global chip shortage going on.
At the time, the CFPB said it’s worried those conditions could make risky auto repossessions seem more lucrative because of the possibly high resale prices. The bureau said it’s taking action against the illegal repossessions.
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