The financing arm of Nissan Motor Company will pay a $4 million fine to the Consumer Financial Protection Bureau (CFPB) to settle charges that it wrongfully repossessed vehicles and committed other unfair and deceptive practices, the regulator announced Tuesday.
The CFPB alleged that Nissan Motor Acceptance Corp. (NMAC) violated consumer protection regulations by repossessing vehicles despite previous agreements with customers not to do so, refusing to return property left in repossessed vehicles to customers until they paid a fee, and pushing customers into costlier and misleading loan repayment and extension options.
Nissan agreed to pay up to $1 million in restitution to harmed consumers along with the $4 million fine, and promised that it would halt the practices at the heart of the order.
“NMAC denies any wrongdoing but has agreed to settle with the CFPB in the best interest for all parties. While NMAC disagrees with the CFPB’s claims, we take their assertions seriously and share their commitment to fair practices for all our customers,” said Nissan spokesman Dan Passe.
The company also agreed to submit a plan for CFPB approval that outlines how it will overhaul internal checks on repossessions, identify future wrongful repossessions and improve board oversight.
The charges brought by the CFPB all fall under its authority to police the consumer finance market for “unfair, abusive and deceptive acts and practices” through the Dodd-Frank Act, the 2010 financial reform law that created the bureau.
The CFPB alleged that Nissan committed unfair acts through its vehicle repossession practices and failing to notify consumers that they would be forced to pay a $7.95 fee for paying their bill over the phone. The bureau also alleged that Nissan deceived customers by asking them to sign loan extension agreements that included an invalid restriction on their ability to file for bankruptcy.