UPDATED: 8/20/14 12:56 pm ET - adds First Investors comment
The Consumer Financial Protection Bureau has fined subprime auto lender First Investors Financial Services Group Inc. $2.75 million for knowingly providing inaccurate information to credit reporting agencies for at least three years.
The bureau released its consent order with the Houston company today.
The CFPB said First Investors failed to fix known flaws in a computer system that was providing inaccurate information to credit reporting agencies.
“Companies cannot pass the buck by blaming a computer system or vendor for their mistakes,” CFPB Director Richard Cordray said in a written statement. “Today’s action sends a signal that the CFPB will hold companies accountable for sending inaccurate information to credit reporting agencies.”
Based on that inaccurate information, credit bureaus were getting wrong data on customer payments and overdue amounts, among other problems, the CFPB said.
In addition to the fine, First Investors must correct errors on consumers’ credit reports, help consumers obtain free copies of their credit reports and establish safeguards that ensure it reports only accurate information to the credit-reporting agencies.
In the consent order, which Cordray signed on Aug. 19, First Investors neither admits nor denies the findings in the consent order.
"To resolve the matter and to avoid the expense and business disruption associated with defending any lawsuit, First Investors elected to settle the CFPB’s claims rather than dispute them in court. First Investors has not admitted any wrong doing," the company said in a written statement.
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