In her first collection-related enforcement action, Andrea Joy Campbell, the new Attorney General of Massachusetts, announced that Toyota Motor Credit Corp., the financing arm of Toyota, will pay $7.6 million in fines and relief after being accused of violating the state’s regulations on collection call frequency while also failing to provide enough information to consumers about their deficiency balances when their vehicles were repossessed.
A copy of the enforcement order can be accessed by clicking here.
This is the third enforcement action that Massachusetts has taken against an auto lender for issues relating to post-repossession disclosures provided to consumers. Previous actions were against Credit Acceptance Corp. and Santander Consumer USA.
Going back as far as 2017, the AG’s office alleged that Toyota Motor Credit violated Massachusetts law by initiating more than two communications during a seven-day period. The exact number of violations was not mentioned in the Assurance of Discontinuance. Toyota also allegedly provided post-repossession notices to borrowers that failed to reference the use of Fair Market Value in the calculation of deficiency balances. Toyota indicated that it “has substantially adopted compliant practices with respect to its post-repossession notices” since August 2018.
“Consumers facing repossession and collection actions on their vehicles deserve clear and transparent information from auto lenders,” said Campbell, in a statement. “It is our hope that the debt waiver and funds secured through this settlement will assist hundreds of residents in getting the relief they need and deserve – and build on our efforts to provide economic opportunity to families across Massachusetts.”
The $7.6 million includes a fine of $2.1 million and $5.5 million in debt relief to affect customers of the lender.
