Toyota Motor Credit Settles for $7.6 Million Over Alleged Illegal Loan Practices

Toyota Motor Credit allegedly misinformed consumers on how much they owed on their loans after their vehicles were repossessed, among other things.

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Automotive News reports that Toyota’s auto finance arm, Toyota Motor Credit has settled with the state of Massachusetts over allegations of illegal auto loan practices. The company has settled for $7.6 million.

On Thursday, February 2, Massachusetts Attorney General Andrea Joy Campbell announced that the state had reached a settlement agreement with Toyota Motor Credit over illegal auto loan practices. The state alleges that Toyota Motor Credit didn’t properly disclose important financial information to consumers once their vehicles were repossessed.


When a vehicle is repossessed, there’s still a balance due on the loan that the customer has to pay, called a deficiency. Massachusetts alleges that Toyota Motor Credit didn’t disclose what calculations the company used to determine the deficiencies left over on these repossessed loans.

Massachusetts also alleges that the company made “excessive collection calls to certain consumers.” This violates the states Debt Collection regulations which say:

Engaging any such person in non-identifying communication via telephone with such frequency as to be unreasonable or to constitute harassment to such person under the circumstances, and engaging any person in communications via telephone, initiated by the creditor, in excess of two calls in each seven-day period at a debtor’s residence and two calls in each 30-day period other than at a debtor’s residence, for each debt.


The Attorney Generals’ office says the $7.6 million settlement includes $5.5 million in debt relief for over 500 consumers across the state. AG Campbell called the settlement a win for consumers. “Consumers facing repossession and collection actions on their vehicles deserve clear and transparent information from auto lenders,” said AG Campbell. “It is our hope that the debt waiver and funds secured through this settlement will assist hundreds of residents in getting the relief they need and deserve — and build on our efforts to provide economic opportunity to families across Massachusetts.”

Toyota Motor Credit denies the allegations. I reached out to Toyota and Toyota Motor Credit for more information. I was told this settlement impacts older accounts prior to 2018, since the company revised its consumer repo notices that year:

Toyota Motor Credit Corporation (TMCC) is committed to doing what’s right for our customers. The company strives to consistently follow all state laws in our sales, customer service, and administrative practices. In settling with the state of Massachusetts, TMCC admits to no wrongdoing. In 2018, TMCC revised our post-repossession notices to comply with the court’s interpretation of the state statute.