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ARTICLE · 22 AUGUST 2023

CFPB Sues Auto-Loan Servicer For Allegedly Harming Consumers

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On August 2, the CFPB filed a lawsuit in Georgia federal court against an auto-loan servicer alleging that the company engaged in various illegal practices that harmed consumers...

United StatesFinance and Banking
Moorari K. Shah
Moorari K. Shah
A.J. Dhaliwal
A.J. Dhaliwal
Matt Benz
Matt Benz
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On August 2, the CFPB filed a lawsuit in Georgia federal court against an auto-loan servicer alleging that the company engaged in various illegal practices that harmed consumers with auto loans. The auto-loan servicer offered both Guaranteed Asset Protection ("GAP") and collateral-protection insurance, which are products that consumers can buy when they buy or lease a car.

The CFPB alleged that the auto loan servicer engaged in the following activities:

  • Illegally disabled cars. The auto-loan servicer disabled vehicles with "kill switches" or "starter interrupters" after promising consumers that it would not do so. Many auto lenders require that cars are installed with devices using GPS technology that allow the lender or servicer to prevent a borrower from starting a car.

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