January 19, 2021

Volume XI, Number 19

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January 19, 2021

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January 18, 2021

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CFPB Assesses $4.75 Million Civil Penalty Against Santander For Systemic Errors Leading to Inaccurate Credit Reporting Of Millions of Accounts

On December 22, 2020, the Consumer Financial Protection Bureau (“CFPB”) reached a $4,750,000 settlement with automobile lender Santander Consumer USA Inc. in connection with its alleged failure to accurately report its consumers’ data to the credit reporting agencies (“CRAs”).    

According to the Consent Order, between January 2016 and August 2019, Santander knew or should have known that it was reporting inaccurate information on millions of accounts as it had received notice from at least one CRA of the errors as early as 2016, its own internal investigation revealed several errors, and the information reported was inconsistent.  One of the primary errors – which occurred over 23 million times – related to the inaccurate reporting of the Date of Account Information (“DOAI”) and Date of First Default (“DOFD”).  In some instances, Santander’s system reported identical information for the DOAI and the DOFD, regardless of the accurate DOFD while in others, the DOFD was not reported at all.  Santander also reported a date of first default on accounts that were not delinquent and failed to accurately report the status of other accounts; namely, whether the accounts were open, paid in full, or charged off.  The Consent Order also reveals that Santander failed to update and correct the erroneous information.

The Consent Order highlights Santander’s lack of internal policies, such as the lack of any written policy requiring employees to update and correct erroneous records prior to 2018.  Strikingly, a 2016 internal audit raised concerns about the lack of written policies related to credit reporting.  The Consent Order further sums it up by stating Santander’s “written policies and procedures regarding the accuracy and integrity of the consumer information that it furnishes to CRAs were inadequate given the high volume and complexity of [Santander’s] furnishing activities and were not reasonable or appropriate given the nature, size, complexity, and scope” of the activities.

Without admitting any fault, Santander agreed to correct all the reporting errors and to do so before reporting any such data to a CRA.  Santander also consented to establish and implement written policies concerning credit reporting and submit the plans to the Regional Director of the CFPB.  The full Consent Order can be found here.

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Copyright © 2020 Womble Bond Dickinson (US) LLP All Rights Reserved.National Law Review, Volume XI, Number 14
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About this Author

Jason Wyman Consumer Finance Attorney Womble Bond Law Firm
Counsel

Jason concentrates his practice in litigation, with particular emphasis on contested foreclosure and consumer finance litigation.  In addition, Jason has significant experience representing creditors in bankruptcy cases.

Admitted to practice in South Carolina and Georgia, Jason is a graduate of Clemson University and a magna cum laude graduate of the Charleston School of Law. While in law school, Jason worked as a Legal Writing Teaching Fellow and served as the Senior Articles Editor of the Charleston Law Review. He received the ABA-ALI Scholarship Award and CALI awards in...

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