CFPB Issues $19M Penalty Against Hyundai Over Credit Reporting

The Consumer Financial Protection Bureau (CFPB) has ordered carmaker Hyundai to pay more than $19 million for providing inaccurate information to credit reporting companies.

The CFPB announced the penalty Tuesday (July 26), saying it was its largest ever Fair Credit Reporting Act (FCRA) case against an auto servicer. The bureau added that Hyundai also failed to take proper steps to deal with inaccurate information after it was identified.

“Hyundai illegally tarnished credit reports for millions of borrowers, including by falsely reporting them to credit reporting companies as being delinquent on their loans and leases,” CFPB Director Rohit Chopra said in a news release. “Loan servicers must be complete and accurate when furnishing information that affects a borrower’s credit report.”

Hyundai was not immediately available for comment Tuesday.

The bureau said it determined the Korean carmaker used manual and outdated systems, processes and procedures to furnish credit information, leading to wide-ranging inaccuracies, and negative information landing on consumers’ credit reports.

The CFPB said it found Hyundai furnished inaccurate information more than 8.7 million times on more than 2.2 million accounts between 2016 and 2020. The bureau ordered the company to pay $13.2 million to redress consumers who were wrongly listed as delinquent, as well as a $6 million civil penalty.

According to the release, the CFPB also found Hyundai violated the FCRA by failing to report accurate, complete lease and loan account information, failing to report first delinquency information, failing to delete information when required, and failing to have reasonable identity theft measures in place.

Read more: CFPB Report Details Failure of Credit Reporting Companies to Probe Disputes

In May, the CFPB issued a report that showed a high level of wrongful auto repossessions by servicers, as well as evidence that some servicers have engaged in numerous unfair ways of repossessing vehicles, even after consumers took steps to remedy their accounts.

In other cases, servicers misled people about how the amount of their final loan payments after the normal payments had been deferred, often due to pandemic-related reasons.