Last Monday, the Consumer Financial Protection Bureau reached a $7.5 million settlement with SMART Payment Plan, LLC, “finding that the company’s disclosures of its loan payment program contained misleading statements in violation of the Consumer Financial Protection Act of 2010’s prohibition against deceptive acts or practices.”
The CFPB states that SMART Payment Plan, LLC made deceptive statements by giving consumers misleading “benefits summaries” that misrepresented the amount of money clients would save by enrolling in their provided auto loan payment plans. However, the CFPB noted, “SMART’s fees would ordinarily exceed the savings,” creating “the misleading impression that consumers would save money using its product.”
The CFPB’s action did not “directly implicate any dealer or allege that any dealer made any deceptive statements,” according to a statement from the National Automobile Dealers Association’s regulatory affairs committee about the settlement, “but the payment plan program was marketed almost exclusively through automobile dealers.”
As NADA stated, this action did not single out any specific dealer for wrongdoing, but it does look similar to a 2015 Federal Trade Commission action that did. We, along with our partners at NADA, remind our members to always carefully and diligently review any disclosures related to financing and voluntary protection products with your legal counsel.
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