Stop Overcharging For Auto Loan Add-on Products

On May 2, the CFPB published a blog post demonstrating its commitment to "a fair, transparent, and competitive auto lending market" by calling attention to add-on products for which auto dealers and finance companies "often charge consumers all payments for any add-on products as a lump sum at origination of the auto loan, and they generally include the lump sum cost as part of the total vehicle financing agreement."  CFPB examiners have focused on how servicers manage these add-on product charges when the loan ends prior to when the add-on product's potential benefits end.

The CFPB notes that its recent Supervisory Highlights reports that examiners found that servicers engaged in unfair practices by failing to request refunds from the third-party administrators for "unearned" fees after the consumer was no longer in possession of the vehicle. Examiners also found that some servicers engage in unfair acts or practices by miscalculating extended warranty products or