CFPB Orders Honda Financial Services to Pay $12.8M for Allegedly Inaccurate Credit Reporting During COVID-19 Crisis

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The Consumer Financial Protection Bureau (CFPB) this month issued an order requiring American Honda Finance Corporation, the automaker’s financing arm, to pay $12.8 million in penalties after finding that the lender’s inaccurate credit reporting has harmed as many as 300,000 Honda and Acura drivers.

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A January 17, 2025 CFPB press release says American Honda Finance Corporation, also known as Honda Financial Services, misrepresented to credit reporting agencies that consumers’ vehicle loans were delinquent when they should have been reported as current.

According to the bureau, Honda Financial Services allowed consumers to defer payments during the COVID-19 pandemic and promised to continue reporting them as current. The CFPB claims the defendant, in violation of the Fair Credit Reporting Act (FCRA), falsely reported those consumers’ loans as delinquent when they did not make payments during the deferral period.

The bureau accused Honda Financial Services, a wholly owned subsidiary of American Honda Motor Co., of damaging borrowers’ credit reports during a national emergency and has ordered the company to provide $10.3 million in consumer redress. The auto lender must also pay a $2.5 million civil penalty to the CFPB’s victims relief fund and correct inaccurate information it furnished about borrowers, the CFPB announced.

Honda Financial Services is also alleged to have failed to properly investigate disputes related to consumers’ credit report information. Additionally, the CFPB determined that the auto lender failed to send investigation results to credit reporting companies and consumers when required, and continued to furnish information even after finding it incomplete or inaccurate.

Per the CFPB, Honda Financial Services failed to fulfill its obligation under the FCRA to implement reasonable written policies and procedures that would ensure the accuracy and integrity of the information it provides to credit reporting agencies.

“Honda Finance used sloppy practices that smeared the credit reports of hundreds of thousands of its customers,” CFPB Director Rohit Chopra said in the press release. “False accusations on a credit report can have serious implications for Americans seeking a job, housing, or a loan.”

In recent years, the CFPB has taken similar action against the vehicle financing subsidiaries of Hyundai and Toyota. Hyundai Capital America in 2022 was ordered by the CFPB to pay $19 million for “widespread credit reporting failures,” while Toyota Motor Credit Corporation the following year was ordered to pay $60 million over “illegal lending and credit reporting misconduct.”

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