Tag Archives: buying discounted car notes
Fair eyes new debt funding
5 lessons to learn from software vendor data breach
According to a June 12 settlement announced by the Federal Trade Commission, back in 2015 an employee of Iowa-based LightYear Dealer Technologies, the parent company of DealerBuilt, plugged in a storage device to the company’s backup network in order to increase storage capacity. However, the employee failed to ensure that the device was securely configured, thereby providing an open, insecure port into the company network, which was open for 18 months.
Subsequently, a hacker was able to penetrate the network and gain access to the company’s unencrypted backup data, including personal information — such as Social Security and drivers’ license numbers — of about 12.5 million consumers, and the entire backup directories of five dealerships. DealerBuilt failed to detect the breach until an auto dealer’s customer complained about personal information becoming public on the internet, and a reporter told the company about the security vulnerability.
Read the full story on our sister site, Auto Finance Excellence, here.
Aussie fintech to enter US auto market
On the heels of growing its Canadian presence, Australian startup CarDeals2Me is in the “final stages” of preparations for a U.S. rollout, Chief Executive Shaun Sumaru told Auto Finance News.
The 2-year-old company will start testing a new product in the U.S. next quarter that enables consumers to complete the vehicle purchase and finance process without physically going to a dealership. Once the platform is in full swing in the U.S., Sumaru expects to add 30 lenders spanning a range of geographies and credit levels.
“Even though the engagement via our platform [in Canada] was great, there was still a steep consumer drop-off when they transitioned to the dealership directly, which is leading us to create a better experience for those consumers wanting to deal indirectly with dealers or brokers for finance and the end purchase,” Sumaru said. “There was a customer service disconnect.”
Also read: Australian startup eyes foray into U.S. market
After six months in Canada, consumer engagement on the platform is 10 times what it was in the company’s first six months in Australia, Sumaru said. For reference, app traffic in June hit 16,000 visits. “The system wasn’t set up to scale that quickly,” he said, adding that the team enhanced the app’s framework to support the growth anticipated in the U.S. market.
CarDeals2Me is an app that provides car buyers with a price quote that expires within 24 hours. The company partners with financiers, OEMs and dealerships in Canada, Australia and New Zealand. Consumers choose a car on the app and apply for financing, and then they receive a quote for 24 hours on the new or used car with trade-in option.
NY dealership owners arrested for lender fraud
Westlake likely to take over SNAAC servicing
BREAKING: SNAAC to shut down this month
Security National Automotive Acceptance Co. (SNAAC) will stop purchasing auto contracts and liquidate its portfolio after 30 years in the business, Auto Finance News has learned.
The lender will accept applications through Aug. 12 and purchase contracts through Aug. 19, the lender told AFN in an email. “The risk-adjusted returns in today’s market do not meet the thresholds SNAAC had set to ensure profitable and sustained growth which led us to this decision,” the email noted.
SNAAC will service loans through mid-September, and then the portfolio will be transitioned to a third-party as it liquidates.
The privately owned lender staffs 136 employees, according to Bloomberg. It’s led by Chief Executive Grant Skeens. The announcement comes on the heels of SNAAC’s initiatives for further growth in the auto lending sector. Earlier this year, the company told AFN that a goal for 2020 was to enhance predictive changes and mine data for its consumer behavior score.
See More: Prior to its shutdown, SNAAC on its customer-centric strategy
Moreover, in February 2018, the lender rolled out a new origination system to dealers in an effort to further hasten the funding process and provide more flexibility to deals. On top of that, SNAAC worked with Defi Solutions to develop the system throughout 2017 to allow for integrations with Dealertrack and RouteOne.
Yet, the initiatives have fallen short of keeping the company afloat. “While SNAAC’s portfolio continues to outperform the industry with declining delinquency and losses, due to diminished profitable growth opportunities within SNAAC’s key market segment, SNAAC’s board of directors has elected to wind down SNAAC’s operations and cease purchasing contracts,” the company noted in the email to AFN.
Meanwhile, SNAAC’s loan volume in two emblematic states — Texas and North Carolina — has been on the decline since January. SNAAC combined in those states to originate 149 loans in June, down from 195 in January, according to AutoCount data.
SNAAC has previously run afoul of the federal government. In 2017, the Mason, Ohio-based lender was hit with a consent order that cost the company $1.25 million in fines, over and above $1 million in refunds to more than 1,000 consumers. That followed a 2015 consent order that “found that SNAAC had indeed engaged in unfair, deceptive and abusive acts and practices” while collecting on outstanding auto loans.
SNAAC has not responded to requests for further comment.
Stay tuned for more details on this developing story…
Florida AG cracks down on auto loan fraud
GM Financial, Hyundai ramp up lease ABS with $1.9B of issuance
CFPB extends FDCPA comment period
Sentiment among consumer advocacy groups is split on the Consumer Financial Protection Bureau’s announcement of the 30-day extension on the comment period for its proposed debt collection rule.
Last month a group of consumer advocacy groups and industry trade groups sent separate letters to the CFPB requesting a 60- to 90-day extension on the comment period related to the Fair Debt Collection Practices Act. Today, the CFPB announced it would extend the comment period 30 days, to Sept. 18.
Read more: CFPB Move to Cap Collection Calls Sparks Controversy Between Agencies, Advocates
“We’re disappointed that the bureau has not honored our request for the full extension,” Bartlett Naylor, financial policy advisor at Public Citizen, told Auto Finance News. “We’re very cynical about the trajectory of what [Director] Kathy Kraninger wants to do,” he said, adding that the extension is “a small bone to us, but certainly not the kind of meal that investors or consumers deserve.”
The Consumer Federation of America, another group involved in the extension request, is more optimistic. “Obviously we wanted more time, but [we’re] happy with the extension that we did get,” said Leandra English, director of financial services advocacy. “Every day matters and gives people more opportunity to get the information they need and put together a comment,” she said.
Read more: Comments pour in on CFPB’s debt collection proposal
Linda Jun, senior policy counsel for Americans for Financial Reform Education Fund, was “grateful” for the extension. “We’d be lying if we wouldn’t have preferred a longer [extension], but it’s still an important amount of time for us to do more outreach,” she said. The extension into the fall “is really important,” because it gives people time to respond after they return from summer vacations, she added.