Business Law

$6.4 Million Penalty for “Buy-Here, Pay Here” Auto Dealer Called Carhop

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On December 17, 2015, the Consumer Financial Protection Bureau (“CFPB”) ordered auto dealer CarHop (and its affiliated financing company) to pay a $6.4 Million civil penalty for allegedly providing “damaging, inaccurate, consumer information to credit reporting companies.”  Carhop was the subject of a CFPB investigation in which the CFPB alleged both parties violated the Fair Credit Reporting Act and the Consumer Financial Protection Act by specifically:

  • Deceiving customers into believing they would be able to build and maintain good credit with CarHop
  • Providing inaccurate repossession information
  • Incorrectly reporting previous customers as still owing money
  • Failure to have “reasonable written policies and procedures” to ensure credit information accuracy. 

In addition to the monetary penalty (which will be allocated to the CFPB’s Civil Penalty Fund) , the companies will be required to cease misrepresenting that they will report “good credit” to the credit reporting agencies; that an audit program will be implemented and followed; provide credit reports to harmed customers; and correct any errors in credit reports.

The consent order can be found at:

For more information, please contact Jennifer Duncan at ResortCom International LLC at

Consumer Financial Services Committee

Jennifer Duncan  
ResortCom International LLC

Vice Chair of Communications 
Alicia Tortarolo
Hudson Cook LLP

Vice Chair of Programming
Andrew Noble
Severson & Werson

Vice Chair of Membership
Scott M. Pearson
Ballard Spahr LLP

Vice Chair of Legislation
Brian Farrell
Sheppard Mullin Richter & Hampton LLP

Avital Samet

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