Toyota recently felt the force of the US government, facing a hefty fine of 60 million dollars from the Consumer Financial Protection Bureau (CFPB) for lending practices considered to be deceptive.
The CFPB alleged that Toyota Financial Services had overburdened consumers with loans that would bump up their monthly payments. The practice was called “packing” because Toyota and its partners would include additional products such as extended warranties and credit insurance in consumers’ contracts without their consent.
Due to the surprise extra expenses in the loan contracts, consumers had to pay much more than anticipated. Many of those affected by the practice were recent college graduates, veterans, and members of the military, with limited knowledge of auto financing and the fine print.
Toyota admitted to the allegations. The company stated that it regretted the problem and the negative impact it had on customers, and vowed to work closely with the CFPB to ensure that customers are provided with better information and products.
In addition to the 60 million dollar fine, the company must also refund over 800,000 affected consumers a total of $16 million dollars. This should be considered a lesson for automakers and lenders alike to become aware of the hidden costs and fine print in their contracts.
Overall, with such a large fine, Toyota is sending out a strong message to companies to make sure that their business practices adhere to the highest standards both ethically and legally.