The Attorney General of Colorado has reached a settlement with one of the nation’s largest subprime auto lenders that will see the company pay more than $3 million in consumer relief while also requiring it to amend its origination and collection practices, including not requiring consumers to make payments through methods that require consumers to pay additional third-party fees, such as money orders.
A copy of the assurance of discontinuance between the Attorney General’s office and Santander Consumer USA can be accessed by clicking here.
As part of the settlement, Santander has agreed to waive the deficiency balances for a certain group of consumers who have defaulted on their car loans, and if Santander had sold the loan, it will try to buy it back so the deficiency balance can be waived, repair the credit of affected individuals, and make changes to how it originates and collects on loans made going forward to avoid the same type of alleged violations of Colorado Fair Debt Collection Practices Act and the Colorado Consumer Protection Act.
“This settlement provides hardworking Coloradans with vital relief and establishes strong guardrails to prevent future harm to Colorado consumers,” said Phil Weiser, the Attorney General of Colorado, in a statement. “We will continue to work hard to protect consumers and encourage Coloradans to report any concerns to our department.”
Santander was accused of violating state law by “exposing consumers to unnecessarily high levels of risk and knowingly placing consumers into auto loans with a high probability of default.”
When accepting payments for its loans, the lender must also “not require Consumers to make payments through methods that require the Consumer to pay additional third-party fees, such as a money order.”
