The consent order details multiple violations , spanning nearly ten years , implicating Hyundai ’ s U . S . subsidiary , Hyundai Capital America . The finance subsidiary purchases and services 1,600 Hyundai , Kia and Genesis dealerships across the U . S . Due to the company consistently needing to pull credit reports for different loans , it is a major factor in many Americans ’ credit scores . For reference , as of 2021 , Hyundai Capital America serviced approximately 1.7 million customers and had over $ 45 billion of reported assets .
Beginning in 2013 , Hyundai Capital America underwent an audit identifying systemic issues causing inaccuracies in the data reported to CRAs . Of the systemic issues , general report inaccuracies , such as misspellings were common , along with leaving sections of the data sheets blank , meaning the information reported could not even be confirmed to be accurate . Hyundai Capital America sought to remedy this , and in July 2015 , initiated a “ Credit Bureau Project ” intended to make changes to the system used to ensure accurate information .
The Credit Bureau Project did fix some issues and made the reporting process more streamlined by keeping the reports in the same regulated format ( Metro 2 ), but it also created new problems . Thus , Hyundai Capital America revamped and reassessed their systems for the next five years to try to fix those issues .
Instead of the issues being resolved , the CFPB received a number of complaints regarding Hyundai ’ s practices , leading to a more thorough investigation . Within the investigation , it was found that Hyundai was “[ furnishing ] pieces of information that were in conflict and could not both or all be accurate ,” neglecting to correct issues and deferring corrections for years , entering inaccurate codes showing delinquent or no payments when consumers had made those payments , and recording incorrect amounts for original loans .
Inaccurate information can happen to any financial institution . It is up to them to fix the errors in a timely manner and work with relevant organizations to confirm compliance . When a systematic error is known , it is best for the financial institution to investigate the issue further in order to avoid future violations or fines . According to the CFPB , one of the best ways to work on this is through reassessing the financial institution ’ s policies and procedures regarding credit reporting to ensure they are adequately following the federal guidelines . Some other positive actions include :
• Updated training
• Additional reviews of data being sent to CRAs
• Ensuring account files are assessed for incorrect data and promptly corrected
• Maintaining systems for thwarting identity theft
The Hyundai consent order is interesting , but not unique . Inaccurate reporting and data entry are exceedingly common and can happen to any financial institution . Taking the extra steps to double check the institution ’ s internal controls is always going to be the best preventative measure against FCRA violations . Keeping tabs on data entry and making sure to pay attention to reports of inaccuracies is a financial institution ’ s best defense against unfair practices that could eventually end up in a consent order .
The Cost of Incorrect Information
Hyundai Capital America , according to the consent order , engaged in years of inadequate reporting practices , which led to $ 19 million in fines .
Financial institutions are required by law to report accurate information to CRAs , due to the sensitive and important nature of the data . In cases like Hyundai ’ s , the institution had knowledge of inaccuracies , and yet still ended up with CFPB fines for not correcting the behavior .
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