Auto lender to pay $5.5 million to settle charges it harassed consumers, collected amounts they didn’t owe
A national subprime auto lender will pay more than $5.5 million to settle Federal Trade Commission charges that the company used illegal tactics to collect consumers’ loans, including collecting money consumers didn’t owe, harassing consumers, and disclosing debts to friends, family, and employers.
Consumer Portfolio Services Inc. agreed to refund or adjust 128,000 consumers’ accounts more than $3.5 million and stop collections on an additional 35,000 accounts to settle charges the company violated the FTC Act.
CPS will pay another $2 million in penalties to settle FTC charges that the company violated collection and credit reporting laws.
The order settling the charges requires CPS to change its business practices to comply with the requirements of the laws. In addition, the company is required to establish and maintain a data integrity program to ensure the accuracy of its loan servicing procedures and the information it services, collects, or sells. CPS must also provide the FTC with independent assessments of its data integrity program for 10 years.
Under the order, the company will begin sending refunds to consumers and adjusting affected account balances within 90 days.
Consumers with questions about their eligibility for a refund or account adjustment should contact CPS directly by telephone at 888-806-2367, by email at FTCsettlement@consumerportfolio.com, or by visiting the company’s website.