OLYMPIA — Washington State Attorney General Bob Ferguson recently announced that Santander Consumer USA Inc., the nation’s largest subprime auto financing company, will pay as much as $6.4 million to Washingtonians in the form of cash relief and loan forgiveness, following a years-long, multistate investigation into its lending and loan servicing practices.
Ferguson alleges Santander engaged in multiple deceptive practices in violation of the Washington Consumer Protection Act, including:
A consent decree filed in King County Superior Court requires extensive restitution for consumers who were harmed, implements significant changes to prevent future abuses, and resolves these allegations.
The AGO also asserts that Santander’s practices encouraged auto dealers to extend loans to people that both Santander and the dealer knew, or should have known, would wind up in default.
When servicing loans, Santander’s employees allegedly routinely confused borrowers about the benefits and risks of partial payments.
If they find the loan was issued to someone whose expenses met or exceeded their income when the loan was issued, and the consumer defaulted within a certain amount of time, Santander is required to forgive that loan.
