The Consumer Financial Protection Bureau (CFPB) has released its oversight highlights report on violations of the law that the agency has identified in the second half of 2021. The report details key findings on products and consumer financial services.
“While most entities act in good faith to comply with the law, CFPB reviewers identify violations of law that result in actual harm,” CFPB Director Rohit Chopra said. “We will continue to review companies to proactively identify and mitigate harmful practices before they become widespread.”
Surveillance reviews are a means by which the CFPB determines whether businesses are complying with federal consumer finance laws.
Improper repossessions of vehicles
In its most recent report, the CFPB focused on alleged illegal practices in auto loan servicing and consumer credit reporting.
The agency said its investigators found that some auto loan officers engaged in unfair acts or practices in repossessing vehicles, even after consumers took intentional steps to prevent the repossessions. According to the report, consumers were almost always taken by surprise when the tow truck arrived to repossess their car or truck.
When consumers lost vehicles to unfair repossessions, investigators found there were other negative effects. They sometimes incurred repossession fees and almost always received negative ratings on their credit reports.
Investigators attributed numerous retakes to what they called miscommunication. In some cases, consumers were behind on their payments because the loan servicer misled them about the amount they owed after payments were suspended during the pandemic.
Credit report issues
Credit reporting companies are required to comply with several regulations to ensure their reports are fair and accurate, but CFPB examiners say they have found instances where this has not happened.
The Fair Credit Reporting Act specifies that when a person disputes a debt on their credit report, the credit reporting agency must make a “reasonable” inquiry into the accuracy of the information. But the CFPB report highlights instances where these investigations did not take place in a timely manner, if at all.
Agency officials have expressed concern that a disputed item on a consumer’s credit report has been used to coerce them into paying money they do not legally owe. In fact, when it comes to medical bills, federal law requires credit reporting agencies to ensure the information is accurate.
When CFPB examiners find issues negatively affecting consumers, they share their findings with businesses to help them correct the situation. For more serious violations or where companies fail to correct the violations, the CFPB opens investigations for possible enforcement action.