Santander Consumer will pay $4.7 million to the Consumer Financial Protection Bureau to address charges that it knowingly supplied inaccurate consumer credit data to the three major credit reporting agencies.
By furnishing consumer data containing “systemic errors,” such as the wrong date an account first became delinquent, the Dallas-based auto lender violated the Fair Credit Reporting Act, the agency said Tuesday. According to a consent order, between June 2016 and August 2019, Santander sent incorrect information on millions of accounts to the credit bureaus, in some cases reporting files as delinquent when they weren’t.
Moreover, the bureau said the Santander knew about some of these errors at least as early as September 2016 and failed to correct them. The agency also said many of the errors were “internally inconsistent” and should have been “readily apparent” to the lender.
In addition to the financial penalty, Santander must fix the errors the CFPB identified and improve its internal policies and procedures concerning the information it reports to the credit bureaus. It must also submit a detailed compliance plan to the agency within 45 days.
In an email, a Santander Consumer spokeswoman said, “We are pleased to resolve this legacy issue and put this matter behind us.”
Earlier this year, the auto lender
The CFPB’s consent order concerns the way Santander Consumer reports information to the three major credit bureaus.
When a lender reports a consumer’s account data to one of the credit bureaus, it must include the date it pulled the information so the credit bureaus can update the information accordingly. It also must include the date the account first became delinquent. This helps the credit bureau to keep its files current and to drop negative information from a consumer’s credit file after seven years, in accordance with the FCRA.
In over 23 million instances, or 35% of accounts, that Santander reported to the credit bureaus during that time, the CFPB said, it gave the same date for both of those pieces of information. Santander Consumer also reported the bulk of those accounts as current, when a first delinquency date typically shouldn’t be reported for a current account, the consent order said.
In some other instances, the agency said that Santander reported inconsistent information about whether accounts were open or closed and whether the borrower was carrying a balance or paid in full. The CFPB said in its consent order that in spite of receiving “multiple error reports” from one of the credit bureaus, Santander did not promptly correct that information.
