Honda’s auto financing arm fined $12.8M over alleged credit reporting lapses

American Honda Finance Corp., the auto financing unit of Honda Motor Co. (NYSE:HMC), has been ordered by the U.S. Consumer Financial Protection Bureau to pay a $12.8M penalty for allegedly posting inaccurate information that impacted the credit reports of hundreds of thousands of Honda and Acura vehicles, according to a statement issued on Friday.

During the Covid-19 pandemic, Honda Finance allowed payment deferrals on auto loans, though the CFPB said it discovered that these accounts were incorrectly reported by the company as delinquent to credit bureaus instead of current.

The consumer watchdog further accused Honda Finance of failing to conduct appropriate probes of customer disputes, the statement said.

As such, Honda Finance will be required to pay $10.3M to harmed customers, as well as a $2.5M penalty to the CFPB’s victims relief fund.