American Honda Finance Corporation was ordered Friday to pay $10.3 million in consumer redress plus a $2.5 million civil money penalty over findings of credit report furnishing inaccuracies and dispute investigation failures during the COVID-19 pandemic, the Consumer Financial Protection Bureau (CFPB) said.
The CFPB said the practices at Honda Finance, a nonbank and the captive automotive finance company for American Honda Motor Co., Inc., violated both the Fair Credit Reporting Act (FCRA) and the Consumer Financial Protection Act (CFPA) and affected the credit reports of 300,000 people who drive Honda and Acura vehicles.
Among the violations cited by the bureau was Honda Finance’s reporting borrowers as delinquent on payments even though the company had deferred certain vehicle loan payments. It said the firm also violated the FCRA and its implementing regulation, Reg V, by:
- continuing to furnish inaccurate and incomplete information after it determined the information was incomplete or inaccurate;
- failing to timely complete indirect dispute investigations and report the results of the investigations to CRAs;
- failing to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the information it furnished to consumer reporting agencies; and
- failing to conduct reasonable investigations of direct disputes and timely report the results to consumers.
Friday’s consent order also requires Honda Finance to come into compliance with the law.
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