Honda Financing to pay $12.8M for smeared credit score

Honda’s finance department also reports customers even if they are current

The Consumer Financial Protection Bureau has ordered American Honda Financial to pay $12.80 (£10.2/€12.2) for damaging the credit scores of around 300,000 customers. This is a shocking victim that appears to be the result of error, oversight and poor business practices.

According to the government, Honda Finance has deferred certain vehicle loans during the COVID-19 pandemic. While this gave Acura and Honda borrowers a little breathing room, the company reported customers defaulting on their loans, even if they were current.

More: Toyota fined $60M for shady lending practices, including unnecessary product bundling

Worse, the government claimed that “Honda Financial continued to provide inaccurate information, even after several types of information were determined to be inaccurate.” When people rightly complained, the company did not properly investigate disputes or bring them to justice when needed. The results of the investigation are sent to the credit reporting company and the consumer.

The government said that between February 2020 and May 2021, Honda Finance agreed to make payments to nearly 85,000 accounts but reported them as delinquent. The Consumer Financial Protection Bureau also said the company “failed to promptly correct the account status of nearly 35,000 accounts where it correctly reported paid account status but later inaccurately reported those accounts as non-paying, causing harm to consumers.” hurt.”

That’s just the tip of the iceberg, as the company “failed to quickly correct reports on approximately 30,000 accounts after determining that the original charge amounts were incorrect.” They also failed to “quickly correct the account status of approximately 1,000 accounts after determining that the account status was inaccurate.”

Rohit Chopra, director of the Consumer Financial Protection Bureau, slammed the company, saying, “Honda Financial used sloppy practices that discredited the credit reports of hundreds of thousands of customers.” He added “False accusations on a credit report can have serious consequences for Americans seeking a job, a home or a loan,” said.

Honda Financial was found to have violated the Fair Credit Reporting Act because they “provided false and harmful information that ultimately drew on the borrower’s credit report.” To pay for its mistakes, the government ordered the company to donate $10.20 (£8.20/€98) to victims and pay a $2.50 (£2/€2.40) civil penalty.

The Consumer Financial Protection Bureau noted that this is not their first fight with Honda Finance, as they cooperated with the Department of Justice in 2015. At the time, the company was found to have unlawfully discriminated against African American, Hispanic, Asian and Pacific Islander borrowers. In this case, they ended up paying $24 (£19.2/€22.9) in violation of the Equal Credit Opportunity Act.