The Consumer Financial Protection Bureau (CFPB) on Aug. 20 ordered an auto finance company to pay a $2.75 million fine for ignoring "known flaws" in a computer system that for years provided inaccurate information to credit reporting agencies about consumers' loan payments and other information.
The lender, Texas-based First Investors Financial Services Group, must fix the errors and change its business practices, the watchdog said. An investigation of the company discovered that the reporting problems had been going on for at least three years, resulting in skewed data about customers' debt payments being sent to credit reporting agencies. The company notified the vendor but took no other action to remedy the problem.
"First Investors showed careless disregard for its customers' financial lives by knowingly distorting their credit profiles for years," said CPFB director Richard Cordray. "Companies cannot pass the buck by blaming a computer system or vendor for their mistakes. Today's action sends a signal that the CFPB will hold companies accountable for sending inaccurate information to credit-reporting agencies."