Hyundai fined $19.2 million for falsifying millions of credit reports

According to the US government, Hyundai Capital America (HCA) repeatedly provided inaccurate information to credit reporting companies and failed to take appropriate steps after the problem was identified.

Furthermore, the Consumer Financial Protection Bureau accused the company of using “manual and outdated systems, processes, and procedures to provide credit reporting information — resulting in massive inaccuracies that placed negative inaccurate information on consumers’ credit reports through no fault of their own.”

The scale of the problem is enormous, with the Consumer Financial Protection Bureau finding that HCA provided false information about about 2.2 million customers more than 8.7 million times between 2016 and 2020. Worse still, “in many cases, Hyundai knew it had provided inaccurate information but still failed to take reasonable steps” to address the problem.

This directly affected consumers because HCA would report customers as delinquent on loans and leases, even though they had been paid on time. In particular, the US government found that “in approximately 570,000 cases, the company displayed tokens of overdue or non-existent payments in its PHP (payment history records) even though, in fact, consumers had completed the required payments and with real accounts.”

This will of course lower the customer's credit score and affect their access to credit, while also causing them to incur higher interest rates due to their lower credit score.

After an investigation, the U.S. Consumer Financial Protection Bureau determined that HCA violated the Fair Credit Reporting Act by failing to fully and accurately report loan and lease account information; failing to provide the date of first breach information when requested; failing to amend or delete information when requested; failing to have reasonable identity theft procedures; and failing to have reasonable accuracy and integrity policies and procedures.

“Hyundai illegally falsified credit reports for millions of borrowers, including falsely reporting to credit reporting companies that their loans and leases were delinquent,” said Rohit Chopra, director of the US Consumer Financial Protection Bureau, in a statement.

“Lenders must be complete and accurate when providing information that affects a borrower’s credit report,” added Rohit Chopra.

HCA will pay a $6 million civil penalty to the U.S. Consumer Financial Protection Bureau as well as $13.2 million in restitution to current and former customers who were given inaccurate information to credit reporting companies, saying they were “more than 30 days past due on a retail auto contract or lease.”

The US Consumer Financial Protection Bureau also revealed that Americans owe $1.4 trillion in auto loans, making it the third largest consumer credit market./.