In its latest “Supervisory Highlights” report released today, the Consumer Financial Protection Bureau highlighted higher car prices leading to more delinquencies in auto lending; unlawful debt collection attempts including on medical debt; and illegal payday lender collection practices. The report covers examinations completed from July 2022 to March 2023.
With automotive lending, CFPB examiners found that consumers were misled by auto lender marketing materials about the quality of car they were eligible for under the terms of an auto loan offer. Examiners also found multiple instances of charging fraudulent interest on inflated loan balances; cancelling automatic payments without sufficient notice, leading to late fees; and engaging in illegal collection practices after repossession.
CFPB found debt collectors continued collection attempts for work-related medical debt after receiving sufficient information to render the debt uncollectible under state worker’s compensation law. Debt collectors violated the Fair Debt Collection Practices Act by collecting an amount not permitted by law or agreement, by falsely representing the character, amount or legal status of a debt, by engaging in conduct that harassed consumers, and by using false or misleading representations with the collection of a debt, the bureau said.
Examiners found payday lenders who put language in loan agreements that prohibited consumers from revoking their consent for the lender to contact consumers about collection on their outstanding balance. Lenders also made false collection threats that would often purport their authority to garnish wages of borrowers, when no such authority exists.
