In November 2014, the CFPB ordered Arizona-based “buy-here, pay-here” car dealer DriveTime to pay an $8 million fine for “making harassing debt collection calls and providing inaccurate credit information to credit reporting agencies.” According to the CFPB, the dealer took advantage of its “buy-here, pay-here” status by selling a car to vulnerable consumers, with their “average customer” having “an annual income of $37,000 to $50,000” and a “FICO score between 461 and 554,” and then extending an auto loan to that customer. When their customer was unable to pay back the loan, DriveTime would harass the borrower and their loan application references, with one woman even noting that she was “unfairly called 30 times at work after her do-not-call request.” The CFPB additional required DriveTime to “end its unfair debt collection tactics, fix its credit reporting practices, and arrange for harmed consumers to obtain free credit reports.”

• DriveTime “operates 117 dealerships in 20 states and, as of December 31, 2013, held more than 150,000 outstanding auto installment contracts” and had “at least 290 collection employees in two domestic call centers and 80 contractors in Barbados.” DriveTime is a “Phoenix-based chain of used-vehicle dealerships.” [Press Release, “CFPB Takes First Action Against ‘Buy-Here, Pay-Here’ Auto Dealer”, Consumer Financial Protection Bureau, 11/19/14; Russ Wiles, “Valley car chain fined $8 mil over credit practices”, The Arizona Republic, 11/21/14]

• DriveTime, “formerly known as Ugly Duckling Corp.,” operates six dealerships in Arizona and “more than 100 in other states, primarily Texas and in the Southeast.” [Russ Wiles, “Valley car chain fined $8 mil over credit practices”, The Arizona Republic, 11/21/14]

• At any given time, “at least 45 percent of DriveTime’s auto installment contracts were delinquent.” As of the end of 2013, “DriveTime had approximately 69,000 installment contracts past due” that led to these harassing phone calls. The extent of these solicitations for payments including calling borrowers at their places of employment, which was encouraged by DriveTime management. One woman noted that she was “unfairly called 30 times at work after her do-not-call request.” It was required of DriveTime customers to “provide the names and phone numbers of at least four references when they applied for financing. When consumers fell behind on their payments, DriveTime called these references.” [Press Release, “CFPB Takes First Action Against ‘Buy-Here, Pay-Here’ Auto Dealer”, Consumer Financial Protection Bureau, 11/19/14]

• In an effort to reach customers that had fallen behind on their loans, DriveTime “frequently used third-party databases to find new phone numbers” that routinely provided false information. This resulted in the dealer contacting random people for, in some cases, “for over a year before stopping.” [Press Release, “CFPB Takes First Action Against ‘Buy-Here, Pay-Here’ Auto Dealer”, Consumer Financial Protection Bureau, 11/19/14]

• DriveTime provided “inaccurate repossession information to credit reporting agencies” about their customers. The dealer “gave the agencies information that inaccurately reflected the timing of repossessions and dates of first delinquency. This made it appear on consumers’ credit reports that consumers’ vehicles had been repossessed more recently than the actual date of repossession.” This false information negatively affected the credit scores of these consumers. When approached about these mistakes by their customers, DriveTime, in many cases, did not mitigate the issue or provide the correct information. The dealer “received 22,000 such complaints in a year but had only two employees dealing with them.” [Press Release, “CFPB Takes First Action Against ‘Buy-Here, Pay-Here’ Auto Dealer”, Consumer Financial Protection Bureau, 11/19/14; Russ Wiles, “Valley car chain fined $8 mil over credit practices”, The Arizona Republic, 11/21/14]