Toyota Pays $60 Million Settlement to Consumers to Whom It Charged Unfair Fees
It is common knowledge that the worse your financial situation is, the less buying a car improves it. If your budget for buying a car is in the triple digits, then you are stuck buying a jalopy that is older than you are from a friend of a friend or purchasing a vehicle with a questionable history from a stranger on Facebook Messenger. These machines end up costing your whole paycheck in repairs and spontaneously dying on I-95 when you are on your way to a job interview. If you are lucky to have an old car with a paid off loan, but you are still broke, you can get an auto title loan, and those are bad news; you can keep making payments until you are on your deathbed and the car is long gone, and you will have barely made a dent in the loan principal. You know you are moving up in the world if you can afford to make a down payment on a car and finance the rest, especially if you are buying from a dealership that has the name of a make of car in its name, such as “Branwell Bloggins Toyota,” since you are dealing with new and certified pre-owned vehicles. It turns out, though, that even reputable car manufacturers are guilty of charging customers plenty of unnecessary fees, and most of the time, they get away with it. If junk fees on your car loan are putting a damper on your finances, contact a Plantation debt lawyer.
Additional Fees on Toyota Car Loans Were Unnecessary and Unnecessarily Difficult to Cancel
The Consumer Financial Protection Bureau (CFPB) has been cracking down on junk fees since its inception, and this month, it ordered Toyota Motor Credit to pay $60 million to compensate for charging customers fees for unnecessary services and making it difficult for customers to cancel those services. Between 2016 and 2021, Toyota charged junk fees to thousands of customers, with the average customer paying between $700 and $2,500 more than they should have on their loans. These are some of the unnecessary services that Toyota added to customers’ loans or pressured them into accepting:
- Guaranteed Asset Protection, which is supplemental insurance that Toyota would pay if a customer’s car is lost or stolen and the customer’s own insurance was not enough to cover the consumer’s financial losses
- Credit Life and Accidental Health Coverage, a type of insurance that pays the remaining balance if the customer dies while the loan is active, thus protecting the customer’s estate from creditor claims
- Vehicle Services Agreements, which pay for some repairs not covered by the warranty
Additionally, Toyota set up a hotline for cancellations and instructed the customer service reps at the hotline to make it difficult for consumers to cancel the unwanted services.
Work With a Debt Lawyer About Getting Relief From Car Loan Debt
A South Florida debt lawyer can help you if a reputable dealership has charged you junk fees on your car loan. Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.