CFPB Orders Toyota Motor Credit to Pay $60 Million

Case: In the Matter of Toyota Motor Credit Corporation, d/b/a Toyota Financial Services
Source: Consumer Financial Protection Bureau
Citation: File No. 2023-CFPB-0015
Decided: November 20, 2023
Bottom line: A lender that knows it reported false late payments must correct them; if your lease ended but late payments kept appearing, dispute them with proof of the return date.

Background

Lenders that report to credit bureaus are “furnishers” under the FCRA. If a furnisher learns that information it reported is not accurate, it must promptly notify the bureaus and correct it. 15 U.S.C. § 1681s-2(a)(2). Regulation V also requires furnishers to have reasonable written policies and procedures for the accuracy of what they report. 12 C.F.R. § 1022.42.

Toyota Motor Credit Corporation is the U.S. financing arm of Toyota Motor Corporation and one of the largest indirect auto lenders in the country. Between 2017 and 2021, it reported payment information on up to about 1.5 million lease accounts per month.

What the order requires

On November 20, 2023, the CFPB issued a consent order finding violations in two areas.

Credit reporting. When a customer ended a lease early, the customer returned the car to a Toyota or Lexus dealer, and the dealer was supposed to notify Toyota Motor Credit, a step called “grounding” the vehicle. Before July 2020, Toyota Motor Credit’s reporting of returned leases depended on the grounding date. Dealers often grounded vehicles long after the customer returned them, so the company kept treating monthly payments as due and “reported these accounts to Consumer Reporting Agencies as delinquent even though consumers were not delinquent because they had already returned their vehicles.”

The CFPB found the company knew of the problem no later than April 2016, including from an audit and from consumer complaints and credit bureau disputes, yet “continued to report inaccurate information to Consumer Reporting Agencies for up to four more years.” At least 27,507 accounts were affected by its failure to promptly correct the information, and in some cases it did not correct errors it learned about from consumers. The CFPB found violations of § 1681s-2(a)(2) and Regulation V.

Add-on products. The CFPB also found that the company made it unreasonably difficult to cancel add-ons such as vehicle service contracts, including after consumers said dealers had added products without their consent, and failed to ensure refunds of unearned GAP and Credit Life and Accident Health premiums when loans or leases ended early. Those were found to be unfair or abusive practices under the Consumer Financial Protection Act.

The order required $48 million in consumer redress and a $12 million civil penalty. It required furnishing procedures “reasonably designed to promote accurate credit reporting to Consumer Reporting Agencies at lease end and promptly correct credit reporting as required to address Toyota and Lexus dealer delays in grounding.” The redress plan included $150 for each inaccurate negative credit marker reported to affected consumers, totaling $6,008,850. The company consented without admitting or denying the findings.

Later development. On May 12, 2025, the CFPB terminated the order and waived “any alleged noncompliance therewith.” The termination specifically referenced the add-on redress provisions. Bloomberg Law reported that the termination relieved the company of roughly $42 million in redress obligations and that it was unclear how much had been paid. The termination order does not say whether the credit reporting redress was paid.

Our take

The credit reporting findings describe a familiar problem: a lender’s internal process breaks, false late payments follow, and the lender keeps reporting them after it knows. The FCRA’s duty to correct exists for exactly this situation. Each false 30-, 60-, or 90-day late mark can lower a credit score and raise the cost of the next loan.

Terminating the order before the redress was complete was the CFPB’s call to make, but it leaves open whether all affected customers were compensated. Termination does not erase the statute or the factual findings, and it does not prevent individual consumers from enforcing their own FCRA rights.

What it means if your report is wrong

If you turned in a leased vehicle and later saw late payments on that account, find your return paperwork, such as the signed odometer statement, which shows the date you gave the car back. Dispute the late payments with each credit bureau and include that proof; a bureau dispute triggers the lender’s duty to investigate, which you can enforce in court. Keep any denial or higher-rate offer you received after the false reporting.

A free case review can assess how this order affects a claim, and there is no fee unless we win.

Sources

Primary

Commentary we reviewed

News: CFPB lets Toyota escape over $40 million in customer refunds (Bloomberg Law)

Updated November 1, 2026. "Our take" is the firm's opinion. This page is general information, not legal advice, and later decisions may change the law.