ACA International dissected the 2015 fiscal year annual report by the CFPB Ombudsman’s Office that’s generated for Richard Cordray, director of the Consumer Financial Protection Bureau.
Officials found the recently released report focused heavily on three potential changes to the CFPB’s consumer complaint database to make it a more effective tool for companies that participate in it.
For instance, the ombudsman followed up on findings from its fiscal year 2014 annual report about the need for data normalization in the consumer complaint database. “This year, we provided feedback and suggestions to the CFPB regarding normalization of the data,” the report said.
The report also noted that the CFPB addressed this issue by putting out a request for information on how to go about data normalization. ACA International was among the organizations that submitted a response this past summer.
“ACA’s comments stressed the importance of complaint data normalization as one way to improve the flawed complaint database so that it is less misleading than what currently exists,” organization officials said.
“By providing context to raw complaint data, ACA argued that the database will be less likely to mislead consumers into attaching undue weight to sheer numbers of complaints, as well as better reflect a company’s actual performance,” they continued.
After examining the consumer complaint database in response to stakeholder concerns, the ombudsman indicated that it worked with the CFPB in an effort to address issues with third party consumer complaint submissions and duplicate complaints.
According to the report, “when third parties submit complaints online on behalf of multiple consumers and complete the submission forms incorrectly, the resulting complaints may have inconsistent information. As a result, the company that is the subject of the complaint may not recognize the consumer and/or the consumer may not be able to access the complaint.”
The ombudsman’s report noted the CFPB plans to address this issue in the future by updating the instructions for consumer complaint submissions.
The report also highlighted company concerns over the CFPB’s definition of “duplicate” in assessing consumer complaints.
According to the CFPB’s Office of Consumer Response, to be considered a duplicate, a complaint must be a verbatim copy of a complaint already submitted. Because of this definition, multiple complaints submitted by the same consumer, regarding the same transaction, the same company, and essentially the same issue — even without presenting any new information — do not meet the definition of a duplicate if the consumer does not use the exact same language in each.
As a result, companies have shared with the ombudsman that when they flag such similar complaints as being duplicates, Office of Consumer Response returns the complaints to the company for a reply because the underlying complaints are not verbatim copies of one another.
To address this, at a Sep. 9 Ombudsman Forum, in which ACA participated, leaders in the financial service industries suggested re-defining a duplicate complaint as one that comes from “the same person, same transaction, and same issue.”
According to the report, to address industry’s concerns over the identification of duplicate complaints, the ombudsman recommended that Consumer Response either provide an updated definition to companies for a duplicate that is not a verbatim copy (such as the definition suggested by industry at the forum), or alternatively to share the existing verbatim definition of a duplicate on the Consumer Complaint Database webpage so that users have a clearer understanding and can make appropriate adjustments.
More about press releases and field hearings
ACA International recapped that the report also included information about the ombudsman’s broader study of CFPB field hearings, and consent orders and their accompanying press releases in 2015.
“This year, the CFPB has faced increased scrutiny for the seemingly harsh language it uses in press releases announcing consent orders with companies. This is an issue that ACA has raised with the ombudsman and one that she discussed in her presentation to ACA members during the Washington Insights Conference in April,” organization officials said.
“In addition, participants in the Ombudsman Forum told members of the CFPB ombudsman’s office that companies view consent orders as a larger notice to their industries about the direction of future enforcement or regulation,” they added.
Here is what the ombudsman’s office shared in the report
“At the same time, without accompanying guidance on general applicability, they indicated that some companies do not know how to proceed,” the report said. “They shared that additional clarity would lead to better compliance. Participants also suggested that the CFPB: include additional context to the issues highlighted in the Supervisory Highlights publication; offer working groups that incorporate industry and consumer groups to inform practical solutions to process issues; and provide additional interpretative guidance on inherited regulations.”
Finally, the ombudsman contrasted the stated goal of CFPB field hearings — “to foster equal participation from consumer and industry groups as well as the public in bureau activities, to obtain feedback in different regions of the country on the Bureau’s work, and to share the work of the CFPB” — with feedback from industry participants.
Industry and consumer groups alike suggested that the CFPB give more than two weeks of lead time in announcing field hearings and be more transparent about the hearings’ logistics.
“ACA has also been vocal about the short notice and logistical challenges surrounding the CFPB’s announcements of field hearings,” organization officials said. “ACA will continue to engage with the Ombudsman on this and other process-related issues on behalf of ACA members.”
The entire Ombudsman's report can be downloaded here.
F&I training specialist Rebecca Chernek is hosting a comprehensive, three-day educational workshop in an attempt to help dealerships and their managers to get into position for their most successful year yet.
Among the 10 workshop highlights Chernek plans to cover during the event are:
— Why inconsistency in F&I product and pricing kills profits and raises scrutiny
— How to remove pressure tactics from the F&I selling process
— How to dramatically reduce the time customers spend in the F&I office
— Why a transactional website engages F&I sooner in the buying process and why that matters
— Why menu selling is a storewide culture, and why compliance doesn’t begin in the F&I office
— Deal structure: The subprime customer
— iPad menu selling and one-option offerings
— Why F&I departments are under scrutiny and how to avoid legal problems.
— How to use dealer-tested solutions for overcoming objections and closing sales
— Leasing is making a come-back so how to present an effective menu with your lease customer.
The workshop is scheduled for Jan. 19-21 at the Hilton Garden Inn Atlanta Northpoint in Alpharetta, Ga.
Along with all of the hands-on training, cost of the workshop also includes:
— Two months of access to the Chernek Consulting Virtual Pro platform
— Certification upon completion of the course
— One month free subscription to Spot Delivery from Hudson Cook
“Streamlining your F&I training procedures ensures performance and peak customer satisfaction. Quit doing business the ‘hard’ way and get all of your managers on the same page today,” Chernek said.
“If your F&I process isn’t working find out why. Our techniques are proven to work and time tested. This workshop assures a significant performance boost while developing a strong bond with customers,” she continued. “You’ll learn how to effectively present your products in a user-friendly, easy to understand format that customers appreciate.
“Expect an interactive F&I training program that will keep you completely captivated absorbed in the content. The course material has been carefully crafted to provide up-to-date content based on today’s highly informative customer,” Chernek went on to say. “Discover why a transactional website will reduce the heavy lifting for you and the customer, dramatically make a difference in converting more customers to your financing and how it will help to reduce the bottleneck in the finance office.
“Learn how not to pitch products, offer a value proposition that wins over more customers and increase F&I product sales,” she added.
More details about the workshop are available in the video at the top of this page or through this website.
Steve Levine used both social media and an email message to SubPrime Auto Finance News to convey thought-provoking reaction to Thursday afternoon’s announcement from the Consumer Financial Protection Bureau.
Levine wondered via Twitter if the industry as a whole is “numb” after noticing “just a ripple” soon after the CFPB’s enforcement actions against Clarity Services for alleged misdeeds associated with credit reporting that included an $8 million civil penalty.
Levine’s entire social media post said, “CFPB takes an $8 million chunk out of Clarity Services for several issues regarding consumer reporting and it’s just a ripple. Are we numb?”
Perhaps the numb assessment stems from the CFPB handing out several million in penalties within the automotive space so far this year, including actions against DriveTime Automotive, American Honda Finance and Fifth Third Bank.
In a separate message after contacting Levine — who has more than two decades of industry legal experience working with dealerships and finance companies — the attorney who also spent time with AutoStar Solutions added, “I’m not surprised by the size of the penalty. It’s become all too common.
“The CFPB has made it very clear that it takes protection of consumer's credit information seriously, and those dealing in reporting better follow the rules,” added Levine, who now is chief legal and compliance officer of Sigma Payment Solutions and SecureClose..
According to the CFPB, Clarity Services did not follow those rules. In its announcement, the bureau charged that Clarity and Tim Ranney — who is the president, chief executive officer, and founder of the company — generated marketing materials for prospective clients by illegally obtaining tens of thousands of consumer reports from other credit reporting companies without a permissible purpose.
The agency also charged Clarity and Ranney used personal consumer information from these reports to help market its products.
For example, in one instance — although the CFPB says members of Clarity’s own staff objected to the illegal conduct — the bureau indicated Clarity and Ranney illegally obtained more than 190,000 consumer reports from another credit reporting company. As a result, consumers’ credit files wrongly reflected a permissible inquiry by a lender.
Along with the $8 million fine, the CFPB is demanding Clarity make a trio of other changes regarding its use of credit reports.
In a statement sent to SubPrime Auto Finance News, Ranney said, “While we do not agree with the CFPB’s allegations, the settlement allows Clarity Services to move beyond this distraction.
“We are focused on delivering innovative solutions and excellent service to our customers,” he continued. “The settlement will not affect that level of service or Clarity’s level of pricing, innovation or technology platform.”
While it appears by Ranney’s comments that Clarity plans to continue to deliver the alternative data finance companies are using to enhance their scorecards and underwriting, Levine maintained a message he stressed to both dealerships and finance companies during his travels and meetings throughout the year.
“I think this matter reinforces the messages that the bureau has been sending: Make sure your vendors are compliant and can demonstrate the legality of their practices and proceed with caution in activities having to do with credit reporting,” Levine said.
“Much like DriveTime, Tricolor and several other cases, companies had better make sure their policies, procedures and processes for handling consumer disputes are solid,” he added.
Two captive finance companies and a commercial bank all made changes to their top executive teams this week.
Beginning with Ford Motor Credit, the Blue Oval’s captive named Joy Falotico as chief operating officer. The OEM also elected Falotico as a corporate officer.
Currently, Falotico, is executive vice president, Ford Credit Marketing, Sales, Americas and Strategic Planning. She has led marketing, sales and the Americas since 2013, with strategic planning responsibilities added in January.
Falotico takes her post as COO on Jan. 1.
At Ford Credit since 1989, Falotico has served in a number of senior-level positions, including an assignment as executive vice president of Ford Credit North America, responsible for the company’s business in the U.S. and Canada, its largest regional operation.
She has served as vice president of U.S. Sales Operations and as vice president of global Marketing. Before that, Falotico had pan-European responsibility for customer and dealer service operations and risk management for Ford Credit Europe.
Falotico serves on the American Financial Services Association board of directors and executive committee. She has been chair of the AFSA Vehicle Finance Division Board since January 2014.
Falotico holds a bachelor’s degree in business administration from Truman State University and a master’s degree in business finance from DePaul University.
VW Credit elevates exec to be president & CEO
Volkswagen Group of America elevated one of its executives at VW Credit this week to be president and chief executive officer of the captive finance company.
Taking on the role effective Jan. 1 is Horst Meima, who most recently served as executive vice president and chief financial officer of VCI. Meima brings with him more than 20 years of experience within the company, including the roles of president and CEO of former Volkswagen Bank USA, vice president of sales and marketing and president and ceo of VW Credit Canada.
In this new role, the company indicated Meima will oversee all functions of VW Credit, the captive finance company which services Volkswagen, Audi and Ducati customers, authorized dealers and their affiliated stores as Volkswagen Credit and Audi Financial Services. He will also serve as chairman of the board for VW Credit Canada.
Meima holds an MBA degree from the UCLA Anderson School of Management and a bachelor’s degree in economics from Colorado State University.
Meima succeeds Christian Dahlheim, who will take on the role of board member for sales and marketing of Volkswagen Financial Services AG, in Braunschweig, Germany, effective Jan. 1.
Huntington names Wirth as auto finance product and strategy director
On Thursday, Huntington Bank appointed Tom Wirth to the position of auto finance product and strategy director. The bank indicated Wirth will lead a team of 40 colleagues across product, strategy, underwriting and risk management with accountability for strengthening Huntington's dealer outreach and product and service innovation.
“Tom has earned tremendous respect across the industry and dealer community alike,” Huntington auto finance director Rich Porrello said.
“We are thrilled to have him on the team to help drive our continued expansion. He has a proven strategic vision for delivering excellent customer service and aligning systems and processes essential for elevating performance and driving strategic growth,” Porrello continued.
Wirth joins Huntington with more than 25 years of experience in auto finance, most recently as senior vice president, indirect line of business manager and national retail executive at U.S. Bank where, during the last 16 years, he helped grow auto finance assets under management to $25 billion.
His previous experience also included serving as vice president, regional manager at Bank One Credit Co. in Milwaukee.
“Huntington is renowned for customer-focused relationships and ingenuity,” Wirth said. “Expect that to continue, as we concentrate on helping a growing portion of the dealer community embrace a full suite of financial strategies that help their businesses perform.”
Wirth served as vice chairman of the Consumer Bankers Association auto finance committee. He has also been involved with the Association of Consumer Vehicle Lessors legal committee and is a past member of the National Vehicle Leasing Association.
Wirth graduated from the Consumer Bankers Association Graduate School of Bank Management and earned his bachelor's degree in business administration from Augustana College. He also is a certified leasing executive by the National Vehicle Leasing Association.
Wirth resides in Mason, Ohio, where he is active in the coaching and mentoring of student athletes with Kingdom Vision Outreach, and he serves on the Marshall High School Advisory Board.
Reynolds and Reynolds now has more resources for dealerships in the Lone Star State.
The week, the company announced that Reynolds Document Services released the Reynolds LAW Texas F&I Library. The library is a comprehensive catalog of standardized, legally reviewed finance and insurance documents for dealers in Texas.
The documents in the LAW Texas F&I Library are available in both paper-based and electronic formats.
“An ongoing challenge for many dealers is how to balance increased demands from legislators and regulators with the increased demands from consumers for a more rewarding experience with the dealership,” said Jerry Kirwan, senior vice president and general manager of Reynolds Document Services.
“Creating the LAW Texas F&I Library is an example of the tools Reynolds is developing to help dealers face these pressures head on as well as to help them prepare for the future of automotive retailing,” Kirwan continued.
Kirwan noted these specific benefits for dealers of the documents in the LAW Texas F&I Library:
1. Minimize compliance risk
The documents in the LAW Texas F&I Library are regularly reviewed for compliance with the latest automotive regulations. Reynolds' industry-leading forms specialists lead the review, in conjunction with Reynolds' outside legal partners.
2. Streamline F&I processes
By using the standardized vehicle deal documents in the LAW Texas F&I Library, dealers can achieve a more consistent and effective F&I process in every transaction.
3. Increase customer satisfaction
The LAW Texas F&I Library contains documents written in consumer-friendly language to help create a more transparent and understandable F&I process and improve the customer experience with the dealership.
4. Smooth the transition to electronic transactions
The printed documents in the LAW Texas F&I Library are also available in a digital format, which helps facilitate the conversion to laser-printed transactions or e-contracting. Reynolds Document Services maintains licensing agreements with all major providers of electronic F&I (e-F&I) solutions.
Now along with Texas, Reynolds has libraries for:
— Arizona
— Oregon
— Colorado
— Tennessee
— Maryland
— North Carolina
— Louisiana
— Alabama
— Massachusetts
— Ohio
— California
— Illinois
— Pennsylvania
— West Virginia
— Washington
— Virginia
The Consumer Financial Protection Bureau is now wielding its enforcement action and penalty powers in the alternative data space.
On Thursday afternoon, the CFPB took action against a nationwide credit reporting company, Clarity Services, and its owner, Tim Ranney, for what the regulator deemed to be illegally obtaining consumer credit reports. Bureau officials charged that Clarity also violated the law by failing to appropriately investigate consumer disputes.
The CFPB is ordering the company and its owner to halt their illegal practices and “improve the way they investigate consumer disputes” and obtain, sell, and resell consumer credit reports.
The company and Ranney must also pay an $8 million penalty to the bureau.
“Credit reporting plays a critical role in consumers’ financial lives,” CFPB director Richard Cordray said. “Clarity and its owner mishandled important consumer information and failed to take appropriate action to investigate consumer disputes. Today, we are holding them accountable for cleaning up the way they do business.”
Clarity Services is a Florida-based credit reporting company that focuses on the subprime market. Ranney is the president, chief executive officer, and founder of the company. The company compiles and sells credit reports to financial service providers, such as payday lenders and subprime auto finance companies.
Clarity purchases credit reports from other credit reporting companies, supplements these reports with alternative data, and resells the repackaged reports to be used in underwriting decisions.
The CFPB contends that companies that purchase Clarity’s consumer reports are often lenders making small-dollar loans to consumers who have thin credit files.
The Fair Credit Reporting Act requires that access to consumer reports be limited to those with a “permissible purpose,” such as a lender making an underwriting decision about a consumer. Among other things, the CFPB stressed this protection helps to ensure that consumer reports are obtained and used appropriately and that consumer privacy rights are protected.
When a lender requests to pull a credit report for a permissible use, the CFPB noted the inquiry often appears on the consumer’s credit file.
In a statement sent to SubPrime Auto Finance News, Ranney said, “While we do not agree with the CFPB’s allegations, the settlement allows Clarity Services to move beyond this distraction.
“We are focused on delivering innovative solutions and excellent service to our customers,” he continued. “The settlement will not affect that level of service or Clarity’s level of pricing, innovation or technology platform.”
Breakdown of misdeeds
The CFPB found that Clarity and Ranney violated the Fair Credit Reporting Act by illegally obtaining the consumer reports of tens of thousands of consumers — without a permissible purpose — for use in marketing materials for potential clients. The bureau noted the company also failed to investigate consumer disputes, including consumer disputes about unauthorized credit inquiries.
The specific violations include:
• Illegally obtaining consumer reports without permission: Clarity and Ranney generated marketing materials for prospective clients by illegally obtaining tens of thousands of consumer reports from other credit reporting companies without a permissible purpose. Clarity and Ranney used personal consumer information from these reports to help market its products.
For example, in one instance — although the CFPB says members of Clarity’s own staff objected to the illegal conduct — Clarity and Ranney illegally obtained more than 190,000 consumer reports from another credit reporting company. As a result, consumers’ credit files wrongly reflected a permissible inquiry by a lender.
When the lender learned of this and raised it with Clarity, the regulator said Clarity and Ranney requested that the credit reporting companies delete evidence of the unauthorized pulls of information from the consumers’ reports.
• Failing to investigate consumer credit reporting disputes: The CFPB found that Clarity failed to investigate consumer disputes, including disputes relating to credit inquiries, even though it was aware that some consumer files were populated with information from unreliable sources.
Specifically, officials indicated the company would not investigate a dispute if a consumer did not supply supporting documents. Even when a consumer identified specific tradelines and the reason why the consumer thought the item was inaccurate or incomplete, the CFPB said Clarity would not reinvestigate unless the consumer provided specific documentation.
The bureau added that Clarity also failed to investigate disputes related to identity theft and routinely failed to provide information to furnishers about consumer disputes.
Enforcement action
Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB said it has the authority to take action against institutions and individuals who violate the Fair Credit Reporting Act.
Under the terms of the administrative order, Clarity and Ranney will be required to:
• End illegal credit reporting practices: Clarity and Ranney must cease their illegal business practices. These illegal practices include pulling consumer reports and selling or reselling consumer reports to users who lack a legal purpose, such as lead generators and those companies that are considering purchasing any service from Clarity or Ranney.
• Improve consumer safeguards: Clarity and Ranney must implement policies and procedures to ensure that users have a permissible purpose to obtain consumer reports and are appropriately credentialed. It must also require consumer data furnishers to provide accurate data and correct data inaccuracies.
• Fully investigate consumer disputes: Among other things, the CFPB mentioned Clarity and Ranney must improve the way the company investigates consumer disputes. As part of this, the company is required to have strong policies and procedures in place to ensure investigations are conducted when Clarity is informed of a consumer dispute, including disputes about unauthorized credit inquiries.
The policies and procedures must also not impose any impermissible precondition to investigation, such as a requirement that a consumer must complete a specific form or provide documentation or other evidence of the dispute before Clarity will conduct an investigation.
• Pay a civil monetary penalty of $8 million: The bureau said Clarity and Ranney will pay an $8 million fine for the illegal actions.
Rob Berger, executive vice president at Wise F&I, was recently elected to serve as president of the Guaranteed Asset Protection Alliance, an organization established in 2006 comprised of companies that offer guaranteed asset protection (GAP) products.
The purpose of GAPA is to monitor and lobby legislative, regulatory and administrative activity impacting the GAP industry. Wise F&I has specialized in GAP for more than 25 years, being one of the first in the industry and continuing to be a provider of GAP to dealers and finance companies.
Berger has been an executive at Wise F&I for more than eight years, playing an integral role in the company’s management and growth. Industry leadership and Berger’s knowledge and expertise of GAP positioned him for the nomination to serve as president of GAPA.
“I look forward to serving as GAPA’s president in support of GAPA’s mission and the ongoing refinement and enhancement of GAP products in general.” said Berger who was elected by GAPA’s member companies at GAPA’s annual conference held this past October in Las Vegas.
To the delight of many in the automotive industry, the House of Representatives voted on and passed a bill aimed at altering the Consumer Financial Protection Bureau’s handling of indirect auto financing.
With a vote of 332 to 96, the House passed what the American International Automobile Dealers Association labeled a “common sense piece of legislation,” otherwise known as the Reforming CFPB Indirect Auto Financing Guidance Act.
If it passes through the Senate and is signed by the president in its current state, the legislation will amend the Consumer Financial Protection Act of 2010 by directing the CFPB, when proposing and issuing guidance primarily related to indirect auto financing, to:
- provide for a public notice and comment period before issuing the guidance in final form;
- make publicly available all information relied on by the CFPB;
- redact any information exempt from disclosure under the Freedom of Information Act;
- consult with the Board of Governors of the Federal Reserve System, the Federal Trade Commission, and the Department of Justice; and
- study the costs and impacts of the guidance to consumers and women-owned, minority-owned, and small businesses.
The act would also nullify the CFPB Bulletin 2013-02, otherwise known as the Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act, which was published in 2013.
"The CFPB is clearly trying to eliminate a consumer's ability to receive a discount on credit in the showroom,” said Peter Welch, the president of the National Automobile Dealers Association. “It is reasonable for Congress to ask for minimal due process to protect consumers.”
Cody Lusk, president of AIADA, issued the following statement on Thursday following the act’s passage through the House:
"International brand automobile dealers vehemently oppose discrimination in any form and fully support the efforts of the CFPB to eliminate it from the marketplace,” Lusk said.
"However, the CFPB has failed time and again to fully disclose its methodology for measuring the presence of disparate impact or provide transparency in issuing guidance to auto lenders. H.R. 1737 is a common sense solution to a problem the CFPB has itself created by working to end dealer discounts on financing without considering the negative impact on consumers.
"The House today chose to support small businesses by pushing back against CFPB policies that reduced competition among lenders and, as a result, raised rates on consumers."
Reynolds and Reynolds recently highlighted that its F&I Libraries now cover 16 states as the company established the Reynolds LAW Arizona F&I Library.
Reynolds reiterated that the library is a comprehensive catalog of standardized, legally reviewed finance and insurance documents for dealers in Arizona. The documents in the LAW Arizona F&I Library are available in both paper-based and electronic formats.
“Dealers continue to face a number of pressures impacting their business,” said Jerry Kirwan, senior vice president and general manager of Reynolds Document Services.
“Among those pressures are increasing levels of regulatory scrutiny and increasing demands from consumers for a more rewarding buying experience with the dealership,” Kirwan said. “Part of Reynolds’ response is to develop tools such as the documents in the LAW Arizona F&I Library that help dealers put in place the mechanisms to deal with these pressures head on as well as help them prepare them for the future of automotive retailing."
Specifically, the documents in the Reynolds LAW Arizona F&I Library can help dealers:
— Minimize compliance risk: The documents in the LAW Arizona F&I Library are regularly reviewed for compliance with the latest automotive regulations. Reynolds' industry-leading forms specialists lead the review, in conjunction with Reynolds' outside legal partners.
— Streamline F&I processes: By using the standardized vehicle deal documents in the LAW Arizona F&I Library, dealers can achieve a more consistent and effective F&I process in every transaction.
— Increase customer satisfaction: The LAW Arizona F&I Library contains documents written in consumer-friendly language to help create a more transparent and understandable F&I process and improve the customer experience with the dealership.
— Smooth the transition to electronic transactions: The printed documents in the LAW Arizona F&I Library are also available in a digital format, which helps facilitate the conversion to laser-printed transactions or e-contracting. Reynolds Document Services maintains licensing agreements with all major providers of electronic F&I (e-F&I) solutions.
Now along with Arizona, Reynolds has libraries for:
—Oregon
—Colorado
— Tennessee
— Maryland
— North Carolina
— Louisiana
— Alabama
— Massachusetts
— Ohio
— California
— Illinois
— Pennsylvania
— West Virginia
— Washington
— Virginia
The Indiana attorney general’s office recently reached a settlement agreement with a Toyota dealership in the Jeff Wyler Automotive Family to resolve allegations that the group charged what state officials deemed to be unfair processing fees when selling vehicles.
State officials indicated about 4,400 former customers will be receiving refunds in the amount of $142 during the next several months as part of settlement totaling $624,800.
Under Indiana’s Motor Vehicle Dealer Unfair Practices Act, dealers cannot require a vehicle buyer to pay a document preparation fee unless the fee reflects expenses actually incurred for the preparation of documents and was negotiated by and disclosed to the customer. Indiana attorney general Greg Zoeller determined Jeff Wyler Toyota of Clarksville consistently charged buyers a processing or document preparation fee of $479, “far higher than the actual costs the company could justify were incurred in preparing documents.”
According to the settlement approved by the Clark County Circuit Court, Jeff Wyler Toyota of Clarksville will pay $142 back to every customer who was overcharged when purchasing a car from the dealership within the past two years starting from Nov. 6.
The group also agreed to no longer charge document preparation fees in excess of $200.
Under the settlement terms, Jeff Wyler Toyota of Clarksville must mail half of the restitution payments to customers within six months of the signed agreement and the other half within the next six months, and the group must report the full list of eligible consumers to the attorney general’s office.
“Hoosiers file complaints with my office about auto sales more often than any other purchase,” Zoeller said.
“Indiana law has certain protections in place to help safeguard consumers when purchasing cars, including a statute that prevents auto dealers from tacking on unnecessary and inflated fees that are often disguised to the customer,” he continued. “I urge all Hoosiers to know their rights and arm themselves with information before purchasing a car.”
Jeff Wyler Toyota of Clarksville is one of two franchised stores the group runs in Indiana. The Jeff Wyler Automotive Family has a total of 25 dealerships with six operations in Kentucky and 17 more in Ohio.
