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CFPB Sues USASF

Lawsuit alleges its actions cost consumers more than $10 million.

August 7, 2023
CFPB Sues USASF

The lawsuit alleges mishandling of guaranteed asset protection refunds, double billing, and failure to apply excess customer payments to interest.

IMAGE: Pexels

2 min to read


 

The Consumer Financial Protection Bureau (CFPB) has sued the servicing arm of U.S. Auto Sales (USASF).

An article in Automotive News reports the U.S. Northern District of Georgia lawsuit alleges that USASF cost consumers more than $10.1 million by:

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  • Mishandling guaranteed asset protection refunds

  • Double-billing customers for collateral protection insurance

  • Failing to apply excess customer payments to interest

  • Wrongfully repossessing vehicles at least 82 times

  • Triggering vehicle starter interrupter “kill switches” in error about 7,500 times

  • Incorrectly activating a 10-second series of tones meant to signal late payments over 71,000 times

The CFPB has announced plans to seek compensation for affected consumers, impose civil penalties, and prevent further violations, according to a CFPB press release.

“The CFPB is suing USASF for a range of misconduct, including illegally activating devices that prevented borrowers from starting their cars,” said CFPB Director Rohit Chopra. “Given the rising cost of cars during the pandemic and jump in auto loan debt across the country, the CFPB is working to root out illegal activity in this market.”

Until it closed down most of its operations in April, the buy-here, pay-here used-vehicle retail group had over 30 locations, with affiliate USASF Servicing managing all auto loans originated by the group, CFPB said.

On May 22, Westlake Portfolio Management assumed servicing duties for the company's $741.5 million portfolio and $391 million worth of loans bundled into securities for investors. Besides its regular loans, Westlake is also dealing with over $195 million in charged-off loans.

Originally posted on Auto Dealer Today

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