The Deceptive Practices of Auto Lenders
The Deceptive Practices of Auto LendersThe Deceptive Practices of Auto Lenders https://www.cmzlaw.net/wp-content/themes/corpus/images/empty/thumbnail.jpg 150 150 CMZ Law Lufkin/Houston https://www.cmzlaw.net/wp-content/themes/corpus/images/empty/thumbnail.jpg
What is being done to protect consumers from unscrupulous auto lenders?
For many individuals and families, having a car is essential to holding a job, making a living, and taking care of their responsibilities. In most cases, having a safe and reliable car requires obtaining financing from an auto lender, but many consumers become the targets of unfair and deceptive practices which are prohibited by state and federal laws.
Recently, the Consumer Finance Protection Bureau (CFPB) issued separate reports regarding apparent deceptive the practices of auto lenders and complaints made to the bureau about leasing and lending practices .
The consumer watchdog found that advertisements by some lenders for GAP coverage, as well as disclosures regarding payment deferral terms, were deceptive. GAP coverage is designed to cover the remaining balance on an auto loan if a car is totaled, however this coverage typically has loan-to-value limit. While that limit it typically high, the lenders under review did not mention these limits in its advertising. With respect to the loan payment deferral options lenders uses as an inducement for consumers to buy an automobile, the disclosures did not accurately reflect that finance charges would ultimately be higher.
Complaints About Auto Lenders are Common
While the CFPB has yet to identify the lenders in question, they are probing the alleged violations and determining whether these lenders will be required to take corrective action. The bureau also reported that 60 percent of consumer loan complaints in the past five years concerned the auto lending industry, including loan, lease and title complaints.
Borrowers frequently reported having issues with managing and paying loans and leases, which was caused, in part, by failing to understand how fees and high interest rates effect the total cost of these financings. In addition, consumers often complained about payment processing issues, including payments not being applied in a timely manner. The bureau also found that lenders often neglected to address consumer complaints and align their business practices with federal consumer law.
While the CFPB has its eye on the deceptive practices of auto lenders, consumers in Texas are also protected by the Deceptive Trade Practices Act. If you suffered a financial injury because of the false, misleading or deceptive practices of a consumer lender in the state, should you contact an experienced consumer law attorney to explore your options.