despite some consumers ’ notes capping applicable fees at no more than 5 % of monthly payments . This $ 25 late fee was later found to exceed the allowable fees based on the contract and debt obligations . They also recounted situations in which consumers continued to be charged unauthorized late fees after loan acceleration and property repossessions . For example , they noted consumer contracts authorized servicers to charge a late fee if periodic payments were more than 10 days delinquent . However , under the terms of the loan agreement , the consumers contractual obligations to this payment would terminate in the situation when the servicer accelerated loan balancing , requiring the remaining loan balance be due and payable upon repossession .
Finally , the CFPB pointed out two additional scenarios related to auto servicing fees that also raised concerns . Specifically , servicers were found charging significantly higher than average repossession costs or unlawfully profiting from kickback incentive payments received from dealers locking borrowers into contracts to make loan payments using traditional financial products or services . The CFPB provided an example related to the repossession costs where they identified some servicers adding an estimated repossession fee of $ 1,000 to the total amount owed to borrowers seeking to pay off the full loan balance and past due amounts to recover their vehicle . In reality , the agency found the estimated repossession fee actually averaged around $ 350 . They noted , “ By policy , the servicers returned the excess amounts to the consumer after they received the invoice for the actual cost from the repossession agent .”
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