Action 9 uncovers the risks of some new car loans from a major lender.
A local woman claims after paying back her loan for five years, she still owed a huge balance and she's far from alone.
Consumer investigator Todd Ulrich started investigating the lender four years ago and now a federal agency is asking questions.
Lindsay Puello bought her Kia Rio new in 2013. Her six-year car loan had a higher interest rate than expected and with a year left, Puello discovered how bad the loan is.
“I need to fight for this. I need to fight for my car,” Puello said.
Her new car loan from Santander Consumer USA totaled $18,000. After five years, Puello said she paid back nearly $19,000. But according to Santander, she still owes nearly $14,000.
“It seems so unfair to have to pay another $14,000 just to have the title in my hand,” Puello said.
Santander USA tends to cater to consumers with troubled credit that are buying new vehicles.
The company has more than 1,900 complaints at the BBB and it responds to those complaints.
Seventeen Santander customers contacted Action 9 since 2016, like Teneis Mathis. She claimed her loan balance went up after paying for three years.
“It's not fair, I get so upset about this,” Mathis said.
Customers told Ulrich most of their payments were going toward interest, and balances remained high despite years of paying.
“It is really crazy, I already paid off my loan,” Puello said.
The new car lender, Santander, faces an investigation by the Consumer Financial Protection Bureau. The consumer watchdog is reviewing claims that Santander misled customers about the cost of its loans. A Santander representative told Ulrich he can't comment on the federal investigation, and the company is reviewing Puello’s complaint.
“I was this close to giving up my car, but no,” Puello said.
Santander told Ulrich that customers who pay on time reduce their balance, but late fees or other extensions can increase it.
Action 9 has helped several customers lower their balances, and recover their titles.
Santander written response:
Regarding our customer, Lindsay Puello, I will have our customer service team look into her account. While privacy laws prevent us from commenting about a customer’s account – and I can’t comment on Lindsay Puello’s account – customers who consistently pay on time reduce their balance in accordance with their contract. If they have late fees or other payment extensions, it will take longer for them to pay off their account.
Regarding the CFPB,
While we cannot comment on conversations with our regulators, Santander Consumer is committed to robust compliance and consumer practices.
Cox Media Group
