Hyundai faces millions of dollars in fines for spoiling its credit scores

Hyundai Capital America is a financial institution that serves Hyundai, Kia and Genesis customers.

Hyundai Capital America is a financial institution that serves Hyundai, Kia and Genesis customers.
picture: Paul Hennessy (Getty Images)

United State Consumer Financial Protection Bureau (CFPB) may be fined Hyundai Capital America Millions of Dollars for Giving Credit Reporting Agencies False Information That Lowered Clients credit scoresand incorrectly reported some loans and rents as ‘overdue’.

The CFPB imposed a civil fine of $6 million, and ordered Hyundai Affiliate to pay another $13.2 million in compensation to customers, according to Reuters. Hyundai Capital America has agreed to pay a total of $19.2 million, in what the CFPB says could be the largest case “against the auto service provider under the federal Fair Credit Reporting Act.”

Hyundai Capital America serves 1.7 million American drivers across the entire Hyundai Motor Group: Hyundai, Kia and Genesis. All three automakers have financing subsidiaries of Hyundai Capital America. But the total number of drivers is less than its existing accounts, and far less than the number of incorrect reports Hyundai Capital has given to consumer credit agencies.

Image of the article titled Hyundai agrees to pay $19.2 million in fines for destroying credit scores

picture: Justin Sullivan (Getty Images)

The CFPB said Hyundai Capital provided inaccurate reports “8.7 million times across 2.2 million accounts from January 2016 to March 2020.” This inaccurate information ended up reflecting poorly on the accounts, resulting in lower credit scores for some customers and signs of reimbursement for others. (Why couldn’t it be the other way around, by the way? Why not give false information that makes poor credit reports look excellent to lenders and agencies?)

In any case, CFPB says Hyundai Capital knew that its credit reporting practices had “systematic” issues because the lender performed its own internal audits. Ignorance can’t really be claimed, then. But the CFPB adds that Hyundai Capital either did not address the problems in time, or at all. Presumably, this is why the civil fine and damages are summed up in a large sum of money. Once again, $19.2 million, Hyundai Capital agreed to pay, although it is unclear from the reports whether Hyundai appealed the fine.

The Hyundai lender is headquartered in Irvine, California. Its client portfolio is worth $45 billion, according to Reuters. For its part, Hyundai Capital America said it will launch a comprehensive review of its credit reporting practices. The lender continued, saying it was committed to “providing high-quality, accurate and timely service and care.” Well, I think it should be a new commitment, applicable to loans and leases classified as satisfactory since about March 2020 or so.

Image of the article titled Hyundai agrees to pay $19.2 million in fines for destroying credit scores

picture: Donzel / Olstein Bild (Getty Images)

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