DALLAS and WASHINGTON, D.C. -

Stemming from an effort to unionize workers, Santander Consumer USA on Friday afternoon vehemently refuted claims contained in a report distributed by the AFL-CIO, National Employment Law Project and Committee for Better Banks about how the finance company’s collections department operates.

In a message to SubPrime Auto Finance News, SCUSA said, “the complaints cited in the ‘report’ misrepresent our work environment,” as one of the sources claimed to have 20 years of industry experience, including time with Santander until a year ago.

“Our customers and our employees are our top priorities, and we continuously review our consumer and business practices to ensure that we are providing responsible financing to consumers who want a vehicle to meet their personal needs,” SCUSA said in its statement. “Santander Consumer has zero tolerance for employee or dealer misconduct, and follows up on all documented employee complaints.

“We were particularly dismayed that the authors chose to mischaracterize ordinary, customer-friendly business practices — such as monitoring customer calls and providing scripts to our workers — as evidence of improper conduct,” Santander continued. “These practices are not only expected by our regulators, but are widely considered standard elements of best-in-class customer service and consumer practices.

“While Santander recognizes and respects the rights of its employees to unionize or not, as they choose under U.S. law, these assertions and mischaracterizations are yet another attempt by union organizers to unfairly discredit Santander to further their own agenda,” the company went on to say.

“Santander prides itself on having an employee-friendly workplace where our employees are respected and motivated and where direct, open and frequent communication between employees and management is encouraged,” the company added.

According to a news release SubPrime Auto Finance News received on Friday afternoon, the report titled, “Wheeling and Dealing Misfortune,” is based on research into Santander’s “extensive history of non-compliance” with consumer protection regulations and interviews with former and current Santander workers. One of the individuals who participated was Jerry Robinson, a 20-year veteran of the auto finance industry and member of the Committee for Better Banks who worked at Santander until 2016.

“When I first joined the industry, my managers encouraged me to listen to customers and address their specific needs, but at Santander, profit always came first,” Robinson said. “Our bonuses were tied to how many loans we could extend and how many cash-strapped customers we could put back in their repossessed cars with higher and higher interest rate loans.

“It made me sick to watch people dig themselves into tens of thousands of dollars in debt, but I knew if I failed to do these things I’d run the risk of disciplinary action that would likely end in termination because of the metric system,” he continued.

Earlier this week, the news release indicated workers from SCUSA’s collections department briefed the Consumer Financial Protection Bureau and members of Congress, including Sen. Elizabeth Warren, Sen. Cory Booker, Sen. Sherrod Brown and Rep. Mark Pocan. They reportedly discussed the report’s findings and recommended regulations to curb the “next subprime financial crisis.”

Report author Molly McGrath said, “Santander Consumer sets the trend for how auto loans are sold and serviced industry-wide. Yet for years, the bank has driven a race to the bottom with questionable banking practices disturbingly reminiscent of the 2008 subprime housing crisis.

“Until now, Santander Consumer has been operating largely in the dark, but the very workers forced to prey on vulnerable consumers are speaking out to demand accountability,” McGrath continued.

In interviews with current and former employees, the report indicated Santander collections workers detailed the finance company’s operations that the authors deemed to be “egregious practices that exploit people of color, seniors and low-income communities.” Examples included:

• To get paid, Santander collections workers had to meet an “ever-changing” set of metrics, based on the number of installment contracts reinstated, ability to collect on late payments, term extensions and speed of calls. One former collections worker shared, “We were under tremendous pressure. Santander did not want us to give (customers) too much information or assistance. They told us to stick to the script and get people to pay.”

• Santander collections workers had adhere to an “impersonal” script that report authors determined to blocks them from asking questions that would help customers “resolve problems quickly, efficiently and without going into further debt.” Calls were monitored through an automated system, CallMiner, which ranks employee tone. One current worker told Congressional staff, “If you do not use the right words or tone, CallMiner will score the call negative, which can result in discipline or termination. This leads to the employee concentrating more on scoring than on the customer.”  

• The report stated CFPB complaints demonstrated that Santander customers frequently misunderstood what a term extension is and the fees associated with an extension. One employee reported seeing terms “with interest rates as high as 27 percent.” Another former employee said she often saw “extensions that had been added without even contacting the customer to get their consent.”

• When customers defaulted on contracts, Santander charges a daily penalty of $15 to $32, “often hidden from customers,” according to the report. Workers reported that managers would not push for repossession teams to pick up a vehicle after a customer had defaulted because every day it remained the per diem charges increased. One worker said that “customers would call me to beg me to send someone to pick up the car.”

Arnise Porter, a Committee for Better Banks organizer based in Dallas, said, “Santander capitalizes on low-income consumers’ desperation with high-interest loans designed to drive borrowers deeper and deeper into debt.

“And then they exploit their pressured workers by forcing them to push predatory loan extensions and hidden fees on customers when they inevitably default,” Porter added.