Photo: Kia
After being accused of using child labor at one of its subsidiaries, Hyundai is once again in trouble. The U.S. Consumer Financial Protection Bureau has ordered Hyundai Capital America to pay $19.2 million for repeatedly giving credit-reporting agencies wrong information about its customers.
Hyundai Motor’s business in the U.S. is doing great, judging by the success of the recently launched electric vehicles like the Hyundai Ioniq 5, Kia EV6, and the Genesis GV60. But despite successful launches, the Korean company makes the news for other, less pleasant reasons. Earlier this week, Hyundai’s reputation was tainted by the accusation of using child labor at one of its subsidiaries, a metal stamping factory in Luverne, Alabama. Now, another scandal risks affecting Hyundai’s credibility.
Hyundai Capital America, the financial arm serving about 1.7 million customers of Hyundai, Kia, and Genesis brands, was found guilty of messing up customers’ credit scores. According to the U.S. Consumer Financial Protection Bureau (CFPB), Hyundai provided inaccurate information more than 8.7 million times across 2.2 million accounts from January 2016 to March 2020. This has tarnished customers’ credit reports, often resulting in lowered credit scores.
CFPB says Hyundai knew that its credit-reporting practices were crooked because the lender conducted its own internal audits. Nevertheless, it failed to address the problem in time or at all. Following the investigation, Hyundai Capital America agreed to pay a $6 million civil fine and $13.2 million restitution to current and former customers. The total amount makes this case the largest against an auto servicer under the federal Fair Credit Reporting Act, according to the CFPB.
The good part of this settlement (beyond the compensations that Hyundai will pay its customers) is that the company agreed to launch an “end-to-end” review of its credit-reporting practices. It has also committed to giving customers “timely, accurate, high-quality service and care.”
Hyundai Capital America, the financial arm serving about 1.7 million customers of Hyundai, Kia, and Genesis brands, was found guilty of messing up customers’ credit scores. According to the U.S. Consumer Financial Protection Bureau (CFPB), Hyundai provided inaccurate information more than 8.7 million times across 2.2 million accounts from January 2016 to March 2020. This has tarnished customers’ credit reports, often resulting in lowered credit scores.
CFPB says Hyundai knew that its credit-reporting practices were crooked because the lender conducted its own internal audits. Nevertheless, it failed to address the problem in time or at all. Following the investigation, Hyundai Capital America agreed to pay a $6 million civil fine and $13.2 million restitution to current and former customers. The total amount makes this case the largest against an auto servicer under the federal Fair Credit Reporting Act, according to the CFPB.
The good part of this settlement (beyond the compensations that Hyundai will pay its customers) is that the company agreed to launch an “end-to-end” review of its credit-reporting practices. It has also committed to giving customers “timely, accurate, high-quality service and care.”
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