August 3, 2023. The CFPB has Uncovered that Dealerships are Powerbooking Financed Transactions.
In studying consumer complaints from July 2022 to March 2023, the Consumer Financial Protection Bureau (CFPB) found a very alarming issue regarding auto dealerships. CFPB investigations are revealing that dealerships are fraudulently representing that vehicles have options and enhancements when they do not (aka powerbooking), resulting in inflated loan amounts and interest that lenders are unfairly and deceptively collecting.
In a separate lawsuit announced by the CFPB on August 2, 2023 against an auto-loan servicer for allegedly disabling vehicles when borrowers were not in default, and for alleged double-billing practices, CFPB Direct Rohit Chopra vowed that “[g]iven the rising cost of cars during the pandemic and jump in auto loan debt across the country, the CFPB is working to root out illegal activity in this market.”
"Powerbooking is on the regulator radar," says Adam Crowell, President & General Counsel at ComplyNet." "With this announcement, expect consumer protection agencies like the CFPB, FTC, State AGs, and others to take actions against dealerships that engaging in this activity."
With the myriad of laws and regulations impacting dealerships, consumer complaints about powerbooking is just one way that a dealership can hit a regulator's radar. ComplyNet works with thousands of dealerships across the company to provide solutions that help prevent illegal activities and regulatory violations, and to resolve consumer complaints before they evolve into investigations.
To learn more about ComplyNet's solutions for managing consumer complaints and compliance in the sales, F&I, and advertising departments, schedule a time to MEET WITH US.
