Toyota Motor Credit Corp. reached a $7.6 million settlement with Massachusetts Attorney General Andrea Joy Campbell, resolving allegations of illegal loan collection practices.
As part of the settlement announced Thursday, the captive finance arm will provide about $5.5 million in debt relief to more than 500 Massachusetts consumers. The rest of the settlement will help pay for the investigation, costs of administering the agreement and some direct payments to borrowers.
The attorney general said Toyota Motor Credit "failed to give certain consumers sufficient information about the calculation methods for deficiencies left on their auto loans after their cars were repossessed." The settlement also alleged Toyota Motor Credit violated the attorney general's debt collection regulations by making "excessive collection calls to certain consumers."
"Consumers facing repossession and collection actions on their vehicles deserve clear and transparent information from auto lenders," Campbell, who became attorney general in January, said in a written statement.
Toyota Motor Credit denied wrongdoing regarding Campbell's allegations.
"The company strives to consistently follow all state laws in our sales, customer service, and administrative practices," Toyota Motor Credit said in a written statement to Automotive News. "In settling with the state of Massachusetts, TMCC admits to no wrongdoing. In 2018, TMCC revised our post-repossession notices to comply with the court's interpretation of the state statute."
