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.