On January 17, 2025, the Consumer Financial Protection Bureau (CFPB) issued a consent order against American Honda Finance Corporation (“Honda Finance”), finding that the company violated federal consumer protection laws by furnishing inaccurate information to credit reporting agencies and mishandling consumer disputes.

Honda Finance, the captive finance arm of American Honda Motor Co., Inc., provides auto loans and leases for Honda and Acura vehicles across the United States. The CFPB determined that the company’s practices violated the Fair Credit Reporting Act (FCRA), Regulation V, and the Consumer Financial Protection Act of 2010 (CFPA).

What Honda Finance Did Wrong

The Bureau’s investigation found that Honda Finance engaged in multiple violations related to inaccurate credit reporting and improper dispute handling — particularly during the COVID-19 pandemic.

1. Reporting Deferred Accounts as Delinquent

During the height of the pandemic, Honda Finance offered consumers the ability to defer payments and publicly promised to continue reporting them as current with credit bureaus. However, instead of honoring that promise, the company reported those deferred accounts as delinquent, falsely suggesting that customers were behind on payments when, in reality, their payments had been paused under an approved deferral plan.

This inaccurate reporting harmed consumers’ credit scores and likely affected their ability to obtain credit, housing, and other financial opportunities.

2. Continuing to Furnish Inaccurate Information

The CFPB also found that Honda Finance continued to report inaccurate and incomplete data after identifying that the information was wrong. Even after recognizing these issues, the company failed to correct or update consumer information in a timely manner, in direct violation of FCRA and Regulation V.

3. Mishandling Consumer Disputes

The Bureau determined that Honda Finance failed to properly investigate disputes received from consumers, both directly and indirectly through credit bureaus. The company often missed deadlines for completing investigations and did not consistently report results to consumers or the credit reporting agencies.

4. Lacking Adequate Policies and Procedures

Honda Finance failed to maintain or implement reasonable written policies and procedures to ensure the accuracy and integrity of the information it furnished to credit bureaus. These deficiencies contributed to widespread errors and inconsistent reporting.

The CFPB’s Action and Penalties

The CFPB’s order requires Honda Finance to:

• Come into full compliance with the Fair Credit Reporting Act and Regulation V.

• Pay $10.3 million in consumer redress to compensate harmed consumers.

• Pay a $2.5 million civil money penalty to the CFPB’s Civil Penalty Fund.

In total, the enforcement action amounts to $12.8 million in penalties and restitution.

Why It Matters

Credit reporting accuracy is critical — especially during times of financial hardship, such as the COVID-19 crisis. When lenders or servicers furnish inaccurate data to credit reporting agencies, it can unfairly damage consumers’ credit and create lasting financial harm.

The CFPB’s order sends a clear message that financial institutions, including large auto lenders, must ensure accurate reporting and fair treatment of consumers, even during crisis relief programs.

What Consumers Can Do

If you believe your auto lender or finance company has reported inaccurate information, you have the right to dispute errors under the Fair Credit Reporting Act.

For accounts reported by Honda Finance, you can file a dispute directly with the credit bureaus and include documentation showing the account was deferred or paid as agreed.

Mailing addresses for major credit bureaus:

• Equifax – P.O. Box 740256, Atlanta, GA 30374-0256

• Experian – P.O. Box 4500, Allen, TX 75013

• TransUnion – P.O. Box 2000, Chester, PA 19016

📬 Tip: Always send disputes by certified mail with return receipt, include a copy of your ID, and keep copies of all supporting documents for your records.

Many consumers who notice a credit reporting issue with their auto loan naturally reach out to Honda Finance first, assuming that the company can fix the problem directly. While contacting the lender is important, the better practice is to also file a dispute with the credit reporting agencies themselves. Doing so triggers the credit bureaus’ legal obligations under the Fair Credit Reporting Act to forward your dispute to the furnisher (in this case, Honda Finance) and require a proper investigation and response. This ensures both the lender and the credit bureaus are legally accountable for correcting the inaccurate information.

Learn More

If you’ve disputed the issue and the inaccurate information still remains on your credit report, contact The Credit Attorney. Our team can review your case, help enforce your rights under the Fair Credit Reporting Act, and take legal action if necessary to get your credit corrected.

You can read the CFPB’s full consent order against American Honda Finance Corporation here:
👉 CFPB Consent Order: American Honda Finance Corporation (January 17, 2025)