Nissan’s credit branch in hot water over illegal foreclosures

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Nissan’s credit arm has been in serious trouble this week. It turned out that there is literally some rules around the trade-in of a consumer’s car. Apparently, Nissan Motor Acceptance Corp. didn’t read those rules, and now they’re going to have to get up.

NMAC is a subsidiary of Nissan North America Inc. and is the primary intermediary for the company’s auto loans. According to Automotive News, in 2018, the company completed 382,000 new auto loans, 299,000 new leases and managed a global block of $ 49.3 billion.

While this is a pretty impressive volume of business, it would be even more impressive if the NMAC followed the rules of its administration. The Consumer Financial Protection Bureau discovered this week that between 2013 and 2019, the NMAC had wrongly repossessed hundreds of consumer vehicles. The vehicles in question were not eligible for legal repossession because consumers had made payments or taken other steps to keep their loan or lease in sufficient condition to prevent repossession. Namely among these actions lowering the delinquency of the loan to less than 60 days. This figure was the schedule set out in the NMAC documents.

But wait, there is more! Nissan was holding consumers’ personal property in repossessed vehicles until they paid storage fees. The company also asked customers to pay by phone and “deprived consumers paying by phone of the ability to select payment options with significantly lower charges.”

Do you think that’s sufficient proof of wrongdoing? Well, there is more. Among a larger group of loans (in the thousands), when the NMAC agreed to change loan payments, it used written agreements and confirmations that included shady language. The language in question “created the false impression that consumers could not file for bankruptcy.”

Nissan categorically denies any wrongdoing in the matter after having read the information provided by the CFPB. However, they are ready to settle and have said they take CFPB’s claims seriously. NMAC shares a “commitment to fair practices for all of our consumers”. The cost of their new engagement? A small fine of $ 4 million.

[Image: Nissan]


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