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CFPB Fines Finance Company for Violating Agreement

Thursday, 27 April 2017 22:53

The Consumer Financial Protection Bureau (CFPB) took action against Security National Automotive Acceptance Co. (SNAAC), an auto lender specializing in loans to service members, for violating a bureau consent order.
In 2015, the CFPB ordered SNAAC to pay both redress and a civil penalty for illegal debt collection tactics, including making threats to contact service members’ commanding officers about debts and exaggerating the consequences of not paying. SNAAC violated the 2015 order by failing to provide more than $1 million in refunds and credits, affecting more than 1,000 consumers.
The new consent order requires SNAAC to make good on the redress it owes to those consumers and pay an additional $1.25 million penalty.
SNAAC, based in Mason, Ohio, is an auto-finance company that operates in more than two dozen states and specializes in loans to service members, primarily to buy used vehicles. In October 2015, a CFPB consent order found that SNAAC had indeed engaged in unfair, deceptive, and abusive acts and practices while collecting on these auto loans.
The order required SNAAC to pay $2.275 million in consumer redress through credits and refunds, and a $1 million civil penalty. Consumers with an account balance were to receive credits to their accounts, and consumers with a zero balance were to receive cash refunds.
While SNAAC submitted two plans that claimed to provide the full amount of redress ordered, both were designed to underpay such redress. Acting on a tip from a service member’s father, the CFPB discovered that SNAAC had issued worthless “credits” to hundreds of consumers and failed to provide proper redress to many more.
The CFPB is issuing the new consent order against SNAAC for violating the terms of the 2015 consent order by failing to properly give refunds or credits to affected borrowers.

State Settles with Dealers for Unrepaired Recalls

Tuesday, 25 April 2017 01:18

New York’s attorney general reached settlements with 104 auto dealerships that sold vehicles without disclosing that the vehicles were under recall for unrepaired safety issues such as unintended acceleration, airbag problems, vehicle fires, steering and brake loss, and more.
An investigation by the AG’s office found that while many prospective car buyers reasonably assume that any known and existing safety issues have been repaired or disclosed by the dealer, that is often not the reality of car buying in New York. As part of its investigation, the attorney general’s office surveyed advertisements, monitored vehicles covered by safety recalls, and identified auto dealers that advertised vehicles with unrepaired safety recalls.
As part of the settlements, the participating auto dealers are required to adhere to a set of guidelines in order to alert consumers that their vehicles may have unrepaired recalls.

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NAAA Updates Arbitration Policy

Wednesday, 19 April 2017 21:56

The National Auto Auction Association has updated its arbitration policy.
The NAAA says the purpose of this updated arbitration policy and guidelines are to continue efforts to conduct transactions with transparency and to build credibility within the industry, products and relationships. It creates a consistent experience, which in turn benefits the seller, the auction, and the customers.
The updates are effective immediately. The updated policies can be reviewed under the policy section at www.naaa.com.

State Suspends Dealer for Service Contract Issues

Wednesday, 05 April 2017 22:32

The Michigan Secretary of State has suspended the license of a used-vehicle dealer after the dealer allegedly did not provide service contract protection that was purchased by customers.
As a result of an investigation, department staff discovered that Northern Motors, LLC in Clare failed to forward funds provided by consumers for the purchase of extended service warranties. The dealership then failed to take the necessary steps to activate the warranties, leaving the customers without warranty protection in the event of a mechanical breakdown.
A hearing will be scheduled at which Northern Motors will have the opportunity to contest the suspension. Additional administrative actions are also possible.