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# FTC puts the brakes on national subprime auto lender
- URL: https://www.foodconsumer.org/subprime_auto_lender_0529140823/
- Published: 2014-05-29T21:21:00.000Z
- Updated: 2026-09-15T14:12:03.000Z
- Description: Consumer Portfolio Services will pay more than $5.5 million to settle FTC allegations that it overcharged auto loan customers and used illegal collection tactics, including harassment and false repossession threats. It will refund or adjust 128,000 accounts and pay $2 million in penalties.
- Author: Food Consumer
- Tags: Miscellaneous, Health News, #vivvo-import

# May 29, 2014

by Colleen Tressler, Consumer Education Specialist

Talk about a bumpy ride for consumers!

When you get [vehicle financing](http://www.consumer.ftc.gov/articles/0056-understanding-vehicle-financing?ref=foodconsumer.org) through a dealership, you and the dealer enter into a contract: you buy a vehicle and agree to pay, over a period of time, the amount financed plus a finance charge. The dealer may hold onto the contract, but typically, it's sold to a bank, finance company or credit union. This “assignee” is responsible for the day-to-day management of your account, including collecting and crediting your monthly payments. But sometimes, things don't go exactly as they should.

Enter the FTC, which charged one assignee – Consumer Portfolio Services, Inc. – with doing everything**but** managing customer accounts properly.

In fact, CPS will pay more than $5.5 million [to settle Federal Trade Commission allegations](http://www.ftc.gov/news-events/press-releases/2014/05/ftc-mails-refund-checks-totaling-nearly-3-million-consumers?ref=foodconsumer.org) that it overcharged consumers across the country, and [used illegal tactics to collect delinquent amounts](http://www.ftc.gov/sites/default/files/documents/cases/2012/10/121009primelegalplanscmpt.pdf?ref=foodconsumer.org). CPS collected money it wasn’t owed, harassed customers and third parties, falsely threatened[repossession](http://www.consumer.ftc.gov/articles/0144-vehicle-repossession?ref=foodconsumer.org), and told family, friends and employers about delinquent customer debts. CPS also failed to develop policies and procedures for responding to consumer disputes about information reported to credit reporting agencies and failed to reasonably investigate and respond to disputes.

In the end, CPS agreed to refund or adjust 128,000 accounts more than $3.5 million, and stop collections on an additional 35,000 accounts to settle the FTC’s charges that the company violated the FTC Act. CPS will pay another $2 million in civil penalties to settle FTC charges that it violated the Fair Debt Collection Practices Act, which protects consumers from abusive or harassing treatment by debt collectors, and the Furnisher Rule of the Fair Credit Reporting Act, which outlines a company’s responsibilities when reporting consumer information to a credit reporting agencies.

Every consumer has the right to be treated fairly when it comes to [debt collection](http://www.consumer.ftc.gov/articles/0149-debt-collection?ref=foodconsumer.org). If you think a company is breaking the law, tell it to the [FTC](https://www.ftccomplaintassistant.gov/?ref=foodconsumer.org#crnt&panel1-1). Your complaints help us stop rip-off artists, scammers and fraudsters. In fact, the FTC opened its investigation of CPS because of the number of complaints people sent us about the company. Your complaints matter at the FTC.