The Consumer Financial Protection Bureau (CFPB) has detailed a federal lawsuit against auto-loan servicer USASF Servicing (USASF), alleging it implemented illegal practices that harmed individuals with auto loans.
“The CFPB is suing USASF for a range of misconduct, including illegally activating devices that prevented borrowers from starting their cars,” CFPB Director Rohit Chopra said. “Given the rising cost of cars during the pandemic and jump in auto loan debt across the country, the CFPB is working to root out illegal activity in this market.”
The CFPB alleges the Lawrenceville, Georgia-based company’s practices include wrongfully disabling borrowers’ vehicles, improperly repossessing vehicles, double-billing borrowers for insurance premiums, and failing to return millions of dollars in refunds to consumers.
The CFPB is seeking to obtain redress for consumers and civil money penalties while also stopping any future violations.
According to the CFPB, auto loans are the third-largest category of outstanding consumer debt after mortgages and student loans. In recent years, the cost of vehicles has risen substantially, resulting in increased borrowing.
The agency has increased its monitoring of the auto lending market and taken action against auto finance companies for wrongful repossessions, poor credit reporting practices and misrepresenting the cost of credit.