They’re at it again!
When you sign a contract for a car loan, do you expect to also be billed for auto insurance premiums?
This is exactly what happened to about 570,000 customers of one of the largest banks in the country between 2012 and 2017, who had not consented to buying auto insurance from them. After being recently caught and fined for opening unauthorized accounts for customers to gain fee income and personal incentives, you would think that this bank would have been more cautious.
Unfortunately, the same game is played in the Leasing Industry. Whether you are an equipment vendor or a leasing customer, it is important to be aware of lessors who engage in these practices.
Dealers will risk the loss of a customer if they recommended a leasing company who bills their customer for unexpected fees that were not openly disclosed in the contract.
Lessees should also be vigilant by closely examining their contract and correlated documents.
- Ask about extra or “surprise” fees before you sign.
- Verify that the billed payment amount is identical to the amount on the contract.
- Challenge any discrepancy.
Just to be clear, it is totally legitimate for a creditor to require verification of property insurance from their customers. The policy of Clune & Company is no different.
This recent case that made the news caused great hardship as it forced almost 250,000 car loan customers into delinquency and 25,000 vehicle repossessions. Let’s hope that those who betray the trust of their customers will be exposed and held accountable.
Kevin F. Clune, CLFP
Clune & Company
