You may instinctively think that a buy here, pay here used car lot is a bit shady.
Still, the dealers in this business often offer a transportation lifeline to consumers who have few other options.
That’s why recent news of a Consumer Financial Protection Bureau (CFPB) lawsuit is so disheartening.
Basically, all the bad things you think might happen to borrowers who use these lots did happen when it came to one particular financing outfit.
Here’s more from NewsBreak:
“The CFPB is suing USASF for a range of misconduct, including illegally activating devices that prevented borrowers from starting their cars,” said CFPB Director Rohit Chopra.
An investigation of USASF revealed the company:
Illegally disabled cars: Many auto lenders require that cars are installed with devices using GPS technology that allow the lender or servicer to prevent a borrower from starting a car. These devices are known as “kill switches” or “starter interrupters.” USASF incorrectly disabled vehicles at least 7,500 times and caused these devices to play warning tones in vehicles over 71,000 times during periods when the consumer was not in default or was in communication with USASF about upcoming payments. USASF remotely disabled vehicles at least 1,500 times after explicitly promising consumers it would not do so.
The company also failed to process millions of dollars of insurance refunds owed to consumers.
Thankfully, the CFPB is taking action, though it may be some time before consumers see checks in their mailboxes.
Speaking of auto lending, a recently-released CFPB report notes that auto lenders top the list of consumer finance complaints. Also on the list: payday loans and medical debt.
The report outlines a number of deceptive practices in auto lending, including:
Charging fraudulent interest on inflated loan balances: Servicers charged interest on loans based on fraudulent representations by dealers that the vehicle had options and enhancements that it did not actually have. When servicers identified discrepancies, they did not reduce the amount that consumers owed on the loan agreements and continued to charge interest tied to financing of the nonexistent options.
Additionally, auto lenders were flagged for repossessing cars even when payments were in process or payment arrangements had been made.
I saw something similar, remote access interference capabilities, recently with regard to Tesla cars and hope it gets looked into as well. It also mentioned that the Tesla battery is not owned by the purchaser of a Tesla car, it remains owned by Tesla, which made me wonder if, in total loss scenarios, are Insurance companies reimbursing/paying out car insurance owners correctly? Shouldn't first responder costs for Tesla battery fire response be sent directly to Tesla if this is the case?