CFPB, Lobel Settle Case

By Staff Writer September 28, 2020

The Consumer Financial Protection Bureau recently settled with Lobel Financial Corporation, an auto-loan servicer based in Anaheim, Calif. The Bureau found that Lobel engaged in unfair practices with respect to its Loss Damage Waiver (LDW) product, in violation of the Consumer Financial Protection Act (CFPA). When a borrower has insufficient insurance, rather than force-placing collateral-protection insurance, Lobel places the LDW product, which is not itself insurance, on borrower accounts and charges a monthly premium of approximately $70 for the LDW coverage. The LDW product provides that Lobel will pay for the cost of covered repairs and, in the event of a total vehicle loss, cancel the borrower’s debt. The Bureau found that Lobel continued to bill certain consumers for LDW coverage but then failed to provide it and assessed fees from consumers that they were not obligated to pay. The order requires Lobel to pay $1,345,224 in consumer redress to approximately 4,000 harmed consumers and a $100,000 civil money penalty. The order also prohibits Lobel from failing to provide consumers with LDW coverage or similar products or services for which it has charged consumers or from charging consumers fees that are not authorized by its LDW contracts.

The Bureau also found that Lobel charged some customers LDW-related fees that Lobel had not disclosed in its LDW contract. This practice was also unfair under the CFPA.

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Last modified on Tuesday, 29 September 2020 14:46