CFPB Files Lawsuit Against Auto Loan-Servicer USASF Servicing

The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against auto-loan servicer USASF Servicing.

USASF is accused of illegally disabling borrowers’ vehicles, improperly repossessing vehicles, double-billing borrowers for insurance premiums, and failing to return refunds to consumers, the CFPB said in a Wednesday (Aug. 2) press release.

“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 in the release.

USASF, headquartered in Lawrenceville, Georgia, serviced auto loans that were originated by its affiliate, buy-here-pay-here auto dealer and lender U.S. Auto Sales, which wound down most of its businesses in April, according to the release.

The CFPB charged that USASF incorrectly disabled vehicles at least 7,500 times and caused warning tones in vehicles over 71,000 times, even when consumers were not in default or were in communication with the company about future payments, according to the release.

In addition, USASF failed to refund millions of dollars in Guaranteed Asset Protection premiums to consumers who had paid off their loans early and had approximately 34,000 consumers who were double charged for insurance, the release said. The CFPB also found that USASF wrongfully repossessed vehicles and sold some of them.

The CFPB has increased its monitoring of the auto lending market, which accounts for the third-largest category of outstanding consumer debt and has been growing as the cost of vehicles has risen, according to the release.

“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,” Chopra said in the release.

The CFPB released a report July 26 that detailed illegal tactics at work in the auto lending, medical debt and payday loan sectors. Among the findings were what the bureau called a “significant shift in the auto lending market,” with prices in the sector rising and consumers often misled by lenders about the quality of car for which they were eligible.

In January, the CFPB and the New York State Office of the Attorney General said they were suing Credit Acceptance Corp., a subprime auto lender, accusing that firm of misrepresenting the cost of credit and tricking customers into high-cost loans.