In a riveting turn of events, the Consumer Financial Protection Bureau (CFPB) announced on Monday a landmark decision against Toyota Motor Corp. The automotive giant’s finance division is set to pay a colossal $60 million, settling allegations that read like a thriller novel. This payment resolves the bureau’s accusations of Toyota’s mistreatment of borrowers, a saga that stretches back years.
Toyota $60M Deal To End Cancellation Claims : A Maze of Misconduct
At the heart of this scandal is Toyota Motor Credit Corp., accused of turning the simple act of canceling add-on product bundles into an almost Herculean task. Borrowers, seeking to shed these unwanted extras, were met with a process described as “unreasonably difficult.” These add-ons, ranging from gap insurance coverage to various other services, were not just mere accessories but significant burdens, inflating loan costs and monthly payments like a balloon ready to pop.
Toyota $60M Deal To End Cancellation Claims : The Hotline Hustle
When borrowers, desperate to escape the clutches of these add-ons, reached out to Toyota Motor Credit, they found themselves in a Kafkaesque scenario. They were “funneled” into a hotline – a veritable labyrinth staffed by specialists in dissuasion. From 2016 to 2021, over 118,000 calls echoed in this hotline hallway, each a story of frustration and thwarted attempts at freedom.
The Three-Request Gauntlet
The plot thickens as the CFPB unveils that only after making not one, not two, but three separate requests would borrowers be informed of the need to mail or fax their cancellation plea. This was but another hurdle in a steeplechase of obstacles. Furthermore, Toyota Motor Credit added insult to injury by manipulating refunds in a manner that delayed them until the vehicle contracts were fully paid, a strategy akin to dangling a carrot just out of reach.
The $60 Million Reckoning
The crescendo of this drama is the CFPB’s consent order, a document that reads like a list of charges against a corporate Goliath. Toyota Motor Credit is mandated to disburse $12 million as a civil penalty and an additional $48 million in compensation to the affected consumers. Notably, the company has neither admitted nor denied the allegations, opting instead to agree to the terms set forth.