Phoenix auto-dealer chain censured for credit practices, from The Arizona Republic.
Phoenix-based DriveTime, which operates 117 used-vehicle dealerships across the nation, was ordered to pay an $8 million penalty and told to clean up its credit-reporting and collections practices.
A Phoenix-based chain of used-vehicle dealerships has been fined $8 million and ordered to clean up its credit and collection practices, which regulators say included harassing phone calls and providing inaccurate information on borrower finances to reporting agencies.
DriveTime Automotive Group, which operates 117 used-vehicle dealerships serving primarily lower-income customers, was ordered by the federal Consumer Financial Protection Bureau to pay the penalty and take other steps to safeguard auto-loan customers who fall behind on their payments.
The company charged a typical 19-percent Annual Percentage Rate on its vehicle loans, with customers borrowing an average $16,300 on vehicles with 40,000 to 120,000 miles on them, the agency reported. Customers had average credit scores of 520, placing on the low side of FICO’s range of 300 to 850. Borrowers typically were fairly young, ranging in age from 26 to 42, with modest incomes.