Connect with us

Hi, what are you looking for?

Financial News

Toyota Faces $60 Million Fine for Unethical Practices

The CFPB has imposed a $60 million penalty on Toyota Motor Credit, the financial division of Toyota, for participating in deceitful activities that impacted numerous consumers. Toyota Motor Credit allegedly deceived customers into purchasing unnecessary products and made it unduly challenging for them to terminate these services.

Several borrowers lodged complaints stating that Toyota Motor Credit added supplementary products to their loans, resulting in charges for the company at the consumers’ expense. Moreover, the company was discovered to have obstructed consumers from cancelling these services.

As per the agreement, Toyota Motor Credit did not acknowledge any misconduct but consented to pay $32 million to consumers who were deprived of deserved reimbursements, $9.9 million to consumers who were unable to annul their policies, $6 million to those affected by inaccurate data reported to consumer reporting firms, and $52,000 for individuals who received incorrect reimbursements. Additionally, the company will pay a $12 million penalty to the CFPB’s victim relief fund.

The CFPB disclosed that Toyota Motor Credit established a vexatious hotline for customers wishing to terminate additional products, requiring customers to submit three phone requests before being informed that the sole method for termination was through a written request. Over 118,000 customers contacted this hotline from 2016 to 2021.

In addition to the financial penalties and restitution, Toyota Motor Credit is obligated to simplify the termination process for undesired coverage, notify consumers of online or written termination alternatives, and oversee dealerships to prevent unauthorized additions of products to customer loans. Furthermore, the company is prohibited from linking employee remuneration or performance criteria to consumer retention of bundled products.

The superfluous products included Guaranteed Asset Protection, Credit Life and Accidental Health coverage, and vehicle service agreements, with average costs ranging from $700 to $2,500 per loan.

The CFPB also emphasized that Toyota Motor Credit deliberately disseminated false information to rating agencies, unjustly impacting customers’ credit ratings by inaccurately reporting missed payments for leased vehicles that had actually been returned.

Image Source: josefkubes / Shutterstock

You May Also Like


Previously, in April, the CEO of Tesla and SpaceX, Elon Musk, caused quite a stir by revealing his intentions to procure the entire social...


Concerns about rising prices are impacting the entire economy of the United States, and one sector that is particularly affected is the real estate...


With rising expenses in fuel and power worldwide, particularly in the United States, the quest for sustainable energy sources has intensified. A significant historical...


Kellogg, a major supplier of packaged foods in the United States and globally, has maintained overall centralized control of all its owned labels during...