CFPB Cracks Down on Indirect Auto Lender

By Jeff Bater

Oct. 1 — A finance company that buys and services car loans must pay $48 million as part of a settlement with the Consumer Financial Protection Bureau (CFPB) over allegations it made false threats of prosecution and used other deceptive tactics to collect debts.

The CFPB ordered Westlake Services and a subsidiary, Wilshire Consumer Credit, to overhaul their debt collection practices, provide consumers $44.1 million in cash relief and balance reductions, and pay a civil penalty of $4.25 million.

By entering into the consent order with the CFPB, the companies neither admitted nor denied any of the findings of fact or conclusions of law. Westlake, a Los Angeles firm, declined to provide comment.

Dodd-Frank Violation

The CFPB said the companies' alleged practices violated the Fair Debt Collection Practices Act, the Truth in Lending Act, and the Dodd-Frank Act. CFPB Director Richard Cordray said the agency will continue to clean up the debt collection market “and root out these illegal and inexcusable practices.”

Westlake Services is an indirect auto finance company that specializes in purchasing and servicing auto loans, including subprime loans, while Wilshire Consumer Credit offers auto title loans directly to consumers and services the loans, according to the CFPB.

The CFPB alleged Westlake and Wilshire deceived consumers by calling under false pretenses and using phony caller identification information, falsely threatened to refer borrowers for investigation or criminal prosecution, and illegally disclosed information about debts to borrowers’ employers, friends, and family.

Deceptive Tactics

The agency gave examples of the tactics allegedly used. The companies’ debt collectors allegedly would pretend they were calling from repossession companies and make threats that the borrowers’ vehicles were in imminent danger of being repossessed. Also, collectors would allegedly pose as pizza delivery men or flower shop employees to trick a consumer into disclosing his location or the location of his vehicle.

“There's no excuse for lying to your customers, and today's action will provide millions of dollars in relief for borrowers caught up in Westlake and Wilshire's deception,” Cordray said. “Consumers struggling to pay their bills deserve to be treated with respect, not subjected to illegal threats and deceptive phone calls.”

To contact the reporter on this story: Jeff Bater in Washington at

To contact the editor responsible for this story: Mike Ferullo in Washington at

For More Information: The CFPB news release and consent order can be seen at