WASHINGTON (Legal Newsline) – The Consumer Financial Protection Bureau (CFPB) recently ordered CarHop and its affiliated financer Universal Acceptance Corp. to cease alleged illegal activities and pay a $6.4 million civil penalty.
CarHop, one of America’s major buy-here, pay-here auto dealers, allegedly gave inaccurate consumer information to credit reporting companies that damaged the consumers’ credit reputation. The CFPB claims the companies reported inaccurate information on more than 84,000 accounts.
“Many consumers went to CarHop because they needed transportation and wanted to build up a good record of paying their bills,” CFPB Director Richard Cordray said. “But CarHop and Universal Acceptance Corp. thwarted those expectations by inaccurately furnishing negative credit information. The CFPB will not stand for companies whose sloppy actions jeopardize consumers’ credit.
Almost all the inaccurate information provided could harm consumers. It could hurt credit scores and create negative effects for those seeking to obtain other credit.
As a buy-here, pay-here auto dealer, the Minnesota-based CarHop sells cars and originates and services the auto loan. Universal Acceptance Corp., on behalf of CarHop, delivers account information to all of the major consumer reporting companies monthly.