CFPB highlights final auto payment issues

The mishandling of consumers’ final payments on auto loans was prominently mentioned in the latest Consumer Financial Protection Bureau’s Supervisory Highlights.

The CFPB’s investigations found multiple instances of servicers not adequately providing notice to borrowers that they were to manually make their final payments though they were enrolled in an autopay program. The consumers were then charged a late fee for failing to make their final payment on time.

“This practice caused substantial injury to the consumers in the form of late fees assessed when the final payment was not made,” said the CFPB report. “Consumers could not reasonably avoid the injury because they had no control over the autopay system the servicers chose to use.  Further, consumers did not reasonably anticipate that a servicer’s autopay system would not make the final payment. Consumers could not reasonably foresee incurring a late charge as a result. The injury was not outweighed by any countervailing benefits to consumers or competition.”

The CFPB reported that services are updating their procedures so the final payment is added to the autopayment system or adequately notifying consumers they need to make payment manually.

The Supervisory Highlights also covers deception and harassment by debt collectors, calling at inconvenient times and using abusive language.

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