The operators of a scheme that allegedly bilked millions of dollars from consumers by trapping them into loans they didn't authorize will be banned from the consumer lending business under settlements with the FTC.
WASHINGTON — Three of the nation's largest indirect auto lenders are poised to limit discretionary pricing for dealers after regulators accused them of allowing partners to mark up loans at higher rates to minorities, according to confidential documents.
More than a year after a collection operation settled charges of extorting payments, the Federal Trade Commission is mailing nearly 95,000 checks totaling approximately $4 million to consumers who lost money in the scam.
The issue of "credit invisibility" has attracted a great deal of attention in recent months. The Consumer Financial Protection Bureau released in May a study finding that 26 million Americans do not have a credit history, and another 18 million are unscorable because their histories are too limited.
Demand for automobile debt in the U.S. is enabling lenders to make longer loans to people with spotty credit, stoking concern that car shoppers are being lulled into debt loads they won't be able to sustain.