The Consumer Financial Protection Bureau released a special report on unlawful junk fees uncovered in deposit accounts and in auto loan servicing and other markets.

Last year, the CFPB issued compliance guidance to the auto loan servicing industry in response to identified practices that included the illegal seizure of cars, sloppy record keeping, unreliable balance statements, and ransom for personal property contained within repossessed vehicles.

In the last six months, CFPB examiners found illegal servicing practices, particularly around the charging of unlawful fees, including hitting car owners with:

• Out-of-bounds and fake late fees: Servicers charged late fees that exceeded the permissible amounts stated in borrowers’ contracts. Servicers also charged late fees to consumers whose cars had been repossessed and their loans accelerated, which means that no payment was due that could have been subject to a late fee.
• Inflated estimated repossession fees: Servicers, before returning vehicles to some consumers, charged inflated estimated repossession fees of $1,000. The average cost to repossess a vehicle is $350.
• Pay-to-pay payment fees and kickback payments: After borrowers were locked into servicer relationships, some auto loan servicers charged payment processing fees for the most common payment methods that far exceeded servicers’ costs for processing payments. Payment processors collected the inflated fees, and the servicers then profited through kickbacks from the processors.