The CFPB has entered into a consent order with Westlake Services, LLC, an indirect auto finance company, and its wholly owned subsidiary, Wilshire Consumer Credit, LLC, for alleged deceptive debt collection practices. The consent order requires the companies to provide $44.1 million in redress and balance relief to borrowers and imposes a civil money penalty of $4.25 million.

According to the consent order, Westlake specializes in purchasing and servicing retail installment contracts, including subprime and near-subprime contracts. Wilshire offers auto title loans directly to borrowers and services those loans, and also purchases and services auto title loans made by other lenders.

The CFPB claimed that Westlake and Wilshire engaged in numerous illegal and deceptive debt collection practices. For example, the CFPB found that the companies used a web-based service, Skip Tracy, to place outgoing calls and choose the phone number and caller ID text the recipient would see. Collectors allegedly pretended to be repossession companies, pizza delivery services, flower shops, family members and friends to trick borrowers into answering the phone and disclosing the location of their vehicle or pressuring borrowers into making payments. The CFPB asserted that when Westlake and Wilshire pretended to be repossession companies calling to collect on the debt, they became “debt collectors” under the Fair Debt Collection Practices Act.

The CFPB also alleged that Westlake and Wilshire falsely threatened to refer borrowers for investigation or criminal prosecution, misrepresented the payment amount necessary to release a repossessed vehicle, falsely represented that borrowers’ vehicles were about to be repossessed to create a sense of urgency, and disclosed borrowers’ loan information to employers, friend and family members.

In addition to these debt collection practices, the CFPB also claimed that Westlake deceived borrowers regarding the effects of due date changes and extensions to loan terms by failing to disclose that these changes would result in the payment of additional interest. Finally, the CFPB claimed Wilshire misleadingly disclosed the monthly interest rate of its title loan products without also disclosing, or while minimizing in fine print, the annual interest rate in advertisements.

Westlake and Wilshire must pay $44.1 million in redress, which consists of $25.8 in cash payments and $18.3 million in balance reductions, as well as a $4.25 million civil money penalty. Additionally, Westlake and Wilshire must end all deceptive debt collection practices and ensure all advertisements comply with the Truth in Lending Act. Finally, Westlake and Wilshire must provide borrowers with accurate information regarding the effect of due date changes and extensions, and obtain borrowers’ informed consent to these changes before implementation.