• CFPB Enforcement Action Against Indirect Auto Finance Company
  • October 27, 2015 | Authors: Peter L. Cockrell; Brett M. Kitt; Gil Rudolph; J. Scott Sheehan
  • Law Firms: Greenberg Traurig, LLP - McLean Office ; Greenberg Traurig, LLP - Washington Office ; Greenberg Traurig, LLP - Houston Office
  • On Oct. 1, the CFPB announced an enforcement action against an indirect auto finance company and its auto title lending subsidiary for alleged violations of the Fair Debt Collection Practices Act (FDCPA), the Truth in Lending Act (TILA), and the Consumer Financial Protection Act (CFPA).

    According to the consent order, the company allegedly deceived consumers, in violation of the CFPA, by calling them under false pretenses, including by impersonating repossession companies and using a Web-based service to place calls to borrowers that appeared to come from pizza delivery services, flower shops, and the borrowers’ family and friends. The company also allegedly violated the FDCPA by threatening to refer borrowers for investigation or criminal prosecution, and disclosing information about debts to borrowers’ employers, friends, and family. According to the consent order, the company’s auto title lending subsidiary allegedly violated TILA by failing to disclose the annual percentage rate of loans in advertisements.

    Under the terms of the consent order, the company must revise its debt collection practices and provide consumers $44.1 million in relief. The company also must pay a $4.25 million civil monetary penalty to the CFPB.