Hyundai pays $19M+ for FCRA and CFPA violations

On July 26, 2022, filed a Consent Order against Hyundai Capital America ("Hyundai"), a vehicle financing subsidiary of Seoul, South Korea-based Hyundai Motor Group, after reviewing Hyundai's consumer credit furnishing practices and identifying violations of the Fair Credit Reporting Act (FCRA) and its implementing regulation, Regulation V (known as the "Furnisher Rule"), and of the Consumer Financial Protection Act of 2010 (CFPA).

The FCRA and Regulation V violations include the following:

(1) Hyundai failed to promptly update and correct information it furnished to Consumer Reporting Agencies (CRAs) that it determined was not complete or accurate, and continued to furnish this inaccurate and incomplete information, in violation of the FCRA § 623(a)(2), 15 U.S.C. § 1681s-2(a)(2);

(2) Hyundai furnished information to CRAs about severely delinquent or charged-off accounts but failed to furnish Dates of First Delinquency (DOFDs) for those accounts, in violation the FCRA § 623(a)(5), 15 U.S.C. § 1681s-2(a)(5);

(3) Hyundai failed to modify or delete information disputed by consumers that Hyundai found to be inaccurate, in violation of the FCRA §§ 623(a)(8)(E) and 623(b)(1)(E), 15 U.S.C. §§ 1681s-2(a)(8)(E) and (b)(1)(E);

(4) Hyundai lacked reasonable procedures to respond to notifications from CRAs indicating previously furnished information was the result of identity theft and therefore must be blocked from an identity theft victim’s credit report, and reported information to CRAs after consumers submitted identity theft reports at the address specified by Hyundai for receiving such reports without subsequently knowing or being informed by the consumer that the information was correct, in violation of the FCRA § 623(a)(6), 15 U.S.C. § 1681s-2(a)(6); and

(5) Hyundai failed to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of information provided to CRAs, consider and incorporate, as appropriate, the guidelines in Appendix E of the Furnisher Rule, or to review and update the policies and procedures to ensure their continued effectiveness, in violation of the Furnisher Rule, 12 C.F.R. §§ 1022.42(a)-(c).

The CFPA violations include the following:

(1) Hyundai violated the CFPA as a result of the above-cited violations of the FCRA and Regulation V, which also constitute independent violations of the CFPA, 12 U.S.C. § 5536(a)(1)(A); and

(2) Hyundai used ineffective manual processes and systems containing known logic errors to furnish information to CRAs, in violation of the CFPA’s prohibition of unfair acts or practices, 12 U.S.C. §§ 5531(c), 5536(a)(1)(B).

Monetary Provisions:
Hyundai must reserve or deposit into a segregated deposit account at least $13,200,000 for providing redress to affected consumers. After completing the Redress Plan, if the amount paid to consumers is less than $13,200,000, the balance of the reserve or segregated deposit amount is to be paid to the CFPB for further redress and or disgorgement.

Hyundai must also pay a $6,000,000 civil money penalty.