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Santander settlement with Massachusetts Attorney General
Santander has agreed to pay $5.6 million as part of a settlement with the Attorney General of Massachusetts over its debt collection practices, the AG’s office announced on Friday, affecting more than 1,000 borrowers throughout the state.
A copy of the assurance of discontinuance between the AG and Santander Consumer USA can be accessed by clicking here.
The $5.6 million will be used to make payments to individuals eligible to receive restitution, paying for costs associated with implementing the restitution, and covering the costs incurred by the Attorney General’s office for investigating the matter.
Santander was accused of failing to provide sufficient information about the calculation methods for any deficiencies remaining on their auto loans after their vehicles were repossessed, known as a deficiency balance. Knowing that amount “can be helpful to consumers determining how to best respond to a lender’s collection efforts,” according to the AG’s office. When an individual defaults on his or her auto loan and the vehicle is repossessed, the vehicle is then sold at auction and the proceeds are applied toward the balance on the loan. In many cases, the proceeds from the sale are not enough to pay off the balance on the loan, leaving the individual with what is known as a deficiency balance.