Consumer complaint received 2021-05-20
Company: Santander Consumer USA Holdings Inc.
State: OH
Product: Vehicle loan or lease
Sub-product: Loan
Issue: Struggling to pay your loan
Sub-issue: Lender trying to repossess or disable the vehicle

Complaint:
THIS IS NOT A DUPLICATE COMPLAINT, I AM ADDING MORE INFORMATION TO MY PREVIOUS COMPLAINT, Santander has attached only one part of the contract.

These are the laws and the things with proof of my documents that Santander USA has put me and probably several other Ohioans through. 

You will see in the documents that I have supplied that there is a footnote or a stipulation on the bottom of the page7, that Max backend allowed is {$2900.00}. Backend allowance can not exceed product maximums ( spelled exactly like that ). 

This allowed me to do research on my own studying the Ohio law that were subsequently violated : Business Opportunity Purchaser 's Protection Act ( 1979 ) ORC 1334.01 Consumer Sales Practices Act ( 1972 ) ORC 1345.01 Section 1345.02|Unfair or deceptive acts or practices In a typical auto-financing transaction, car dealers attempt to maximize the profits they earn on the front-end and back-end of an individual deal. The front-end of a transaction involves the negotiation of a sales price, whereas the back-end refers to the negotiation of ancillary products included as part of the financing of the purchase of the vehicle.

Even when acting as an indirect auto lender by purchasing installment contracts from dealers, Santander has significant control over the extension of credit or financing of a transaction, including the back-end of a transaction, such as whether to purchase a contract that includes guaranteed-asset protection ( GAP ) insurance, a GAP waiver and/or a service contract. As part of my auto finance through Santander, I was told I had to have two different service contracts that included Wrap OEMO/CPO, on pages 16 and 17 these items are shown. With interest rates in the amount of 20.73 %, increasing my interest rate 2 % more than stated on the decision page ( p.7 ). Through its credit policies, Santander asserts control over the amount dealers can include in the back-end. The generous allowances for dealers on the back-end have facilitated Santander obtaining more market share, but those same large back-end charges expose consumers to increased risk in at least two ways : 1 ) significant back-end charges increase the overall amount financed, which increases the loan-to-value ratio on the loan ; and 2 ) high finance costs increase either the consumers monthly principal-to-interest ratio or increase the term of the loan. Santander is aware that these loan features contribute to deteriorating loan quality but continues to make these loans or purchase the underlying installment contracts. Santanders aggressive pursuit of market share led it to underestimate risk associated with loans with stated income and expenses. Although Santander has sophisticated models that forecast consumer default, Santanders policies with respect to stated income and expenses allow it to underestimate default risk in important ways and to purchase loans from consumers who are unlikely to be able to pay for their loans. Santander also fails to meaningfully monitor dealer behavior such as my own to minimize the risk 5 of receiving falsified information, including the amounts specified for consumers income and expenses. One area where Santanders lack of verification as part of its underwriting, I was never once asked to prove my income, I see on documents that states that I own my house outright. I have lived at this same address for almost 10 years, I have never held ownership of this home, nor does it state that I have any real property on my credit report. At the time of my purchase my six sons were not accounted for my monthly debt -to- ratio. As stated on page 7, only my backend PTI was accounted for, which would be my insurance payment on the car I had prior, being only {$130.00} per month ( getting a new sports sedan doubled my monthly insurance ) and the car note that Santander assigned to me in the amount of {$510.00} totaling {$650.00} per month, only putting my DTI at 24.1 % which was not accurate. My DTI was over 45 % percent at the time of this loan agreement.

I am asking for you to step in and assist with everything stated, all my documents support my complaint that I have originally submitted to the Ohio Attorney Generals office. As I stated that this is not an isolated issue, conducting research on this very topic, there are over 1052 complaints on BBB stating how they have made several payments, and none seem to go towards their principle. I have personal paid {$15000.00} towards my car, even though there was to be a set percent of interest, the same amount monthly was not applied towards the principal and interest, looking at the documents attached, you will see that the amount is more that 20.73 %.

In addition to my research, I have read that Santanders known practice is seeing the consumers borrowing history and features of the loan the consumer has applied for ( such as loan-to-value ratio, debt-to-income ratio, payment-to-income ratio, mileage, and term ) and generates a probability that a consumer will become severely delinquent during a particular window of time within the term of the loan. I personal became delinquent with my loan within eight to ten months of the beginning of my loan. This probability then is converted into a scaled score on a proprietary, FICO-like scale. Due to the model Santander continues to use, this indicates how likely I the consumer would go delinquent within that window of time within the term of the loan. Santander is also said to use a separate model to predict how likely a consumer with a given proprietary score will default over the full life of the loan. This would allow Santander to tell the consumer to give a large lump sum of a payment to save their car from being repossessed and not disclosing that almost the entire amount of that payment would go towards interest and not towards the actual principles of the car, which I have done a total of five times. In June of 2020 I paid a large payment, in the amount of {$1300.00} and another payment of my actual payment amount. Close to {$700.00} went towards interest. On the day I made the second payment in XXXX, my payoff balance was set at {$12000.00}, I remember that amount because I felt I was so close to having this car paid off, a week later I received a letter which is attached that the amount shot up to {$16000.00}, the exact amount that is on one of the documents that is in the documents that are attached.

I hope that the information helps with my pursuit to show that Santander is no better than a payday lender and they in fact are a predatory lender and hurt more than they help. I also want to add that I was told to lower my payments I would need to have my car refinanced, do to my debt to ratio and missed payments with Santander and the high payoff amount, that was not going to happen.

Please note when I speak of page 7, I am speaking of the first pdf file named XXXX XXXX 
Thank you,

Company response to consumer: Closed with explanation