Hyundai, CFPB reach $19M settlement over inaccurate credit reporting

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Hyundai credit reporting settlement overview: 

• Who: Hyundai Capital America reached a $19 million settlement with the Consumer Financial Protection Bureau.
• Why: The settlement comes amid claims the company provided millions of inaccurate customer credit disclosures.
• Where: The settlement was reached in the United States.

A record-breaking $19 million settlement has been reached between Hyundai Capital America and the Consumer Financial Protection Bureau (CFPB) over claims the automaker issued more than 8 million inaccurate credit disclosures, some leading to lower credit scores for customers. 

The bureau lodged a settlement consent order July 26. According to the CFPB, Hyundai violated the Fair Credit Reporting Act by furnishing inaccurate customer payment history data on more than two million consumer accounts between 2016 and 2020. 

The settlement is the largest ever Fair Credit Reporting Act case against an auto servicer, the CFPB says.

“In more than 8.7 million instances across 2.2 million accounts, [Hyundai] furnished to credit reporting agencies inaccurate payment history profile (PHP) data for consumers that it had determined was inaccurate,” the order states. 

Hyundai credit reporting order says automaker wrongly reported late or missed payments

A consumer’s PHP is the 24-month history of a consumer’s past payments showing whether they were paid, not paid, paid late and, if late, the degree to which they were late. Hyundai furnished this information inaccurately in a variety of ways that impacted consumers, the CFPB says.

In about 570,000 instances, it inaccurately inserted codes showing delinquent or no payments when the consumer had in fact made the required payments.

“When Hyundai furnished inaccurate negative consumer information, it sometimes led to lower credit scores and may have negatively affected consumers’ access to credit,” the CFPB says.

The CFPB also claimed Hyundai knew it provided inaccurate information yet took years to take “reasonable measures” to address the problems.

The company must pay $13.2 million to affected consumers who were inaccurately reported as delinquent and a $6 million civil money penalty.

As part of the Hyundai credit reporting settlement, Hyundai must correct all inaccurate account information through an internal review.

In related Hyundai news, in 2016, ​​Hyundai Capital America faced a class action lawsuit alleging it violated the Telephone Consumer Protection Act by frequently making automated calls to consumers without their permission.

What do you think of the Hyundai credit reporting settlement? Let us know your thoughts in the comments! 

The Hyundai credit reporting settlement order is In the Matter of: Hyundai Capital America, Case No. 2022-CFPB-0005, before the Consumer Financial Protection Bureau. 

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