Consumer complaint received 2026-01-29 00:00:00
Product: Vehicle loan or lease — Loan
Issue: Managing the loan or lease — Billing problem
Company: Consumer Portfolio Services, Inc.
State: CA

Complaint narrative:
This complaint supplements and references CFPB Case # XXXX, which was closed before I obtained and analyzed new documentary evidence. 
XXXX reported my account as delinquent and later as charged off while internally applying my payments in a manner that did not reduce principal. XXXX had access to these records and therefore knew or should have known that its credit reporting and balance representations did not align with how my payments were actually applied. 

I entered into a Retail Installment Sales Contract for a XXXX XXXX XXXX, which was assigned to XXXX. My required payment was {$460.00} per month beginning XX/XX/XXXX. 
Between XXXX and XX/XX/XXXX, I made multiple payments to XXXX. However, XXXX internally applied 100 % of my payments to interest and fees, leaving my principal balance unchanged. As shown in XXXX  own payment history, {$1400.00} was paid, yet {$0.00} was applied to principal. 
At no time did XXXX disclose that my payments would be allocated in this manner or that principal would not be reduced. 

XXXX internal ledger shows : Payments posted XXXX XXXX All payments applied only to interest and fees No reduction of principal Yet XXXX reported to consumer reporting agencies that : The account was 30/60/90 days late The account was charged off The entire balance was past due These reports directly contradict XXXX internal records. 

After filing arbitration and regulatory complaints, I obtained a XXXX investor presentation describing its loan performance strategy. XXXX discloses to investors that it : Uses proprietary risk scoring and segmentation models Applies raised APRs to certain borrower tiers Prioritizes early-stage interest revenue Uses performance algorithms to optimize yield across securitized portfolios These disclosures show that XXXX  servicing practices are not neutral accounting decisions they are part of a revenue strategy tied to interest extraction and portfolio performance. 
This investor-facing strategy aligns directly with what occurred in my account : Payments were absorbed entirely by interest, principal remained unchanged, and the account was positioned as delinquent and then charged off even while payments had been made. 
None of these revenue mechanisms, algorithms, or interest-maximizing strategies were disclosed in my consumer contract. 

XXXX never disclosed : That payments could be applied in a way that prevented principal reduction That this allocation would increase finance charges That internal scoring or portfolio strategies could affect how payments are applied A consumer can not meaningfully consent to a loan structure where payments do not reduce the debt and instead accelerate default. 

1. Proprietary Scorecard Suite XXXX states it uses multiple internal scorecards that govern loan behavior and outcomes : Early Payment Default ( EPD ) Scorecard Collection Behavior Scorecard Extension Scorecard Deal Scorecard Applicant Scorecard Repo-Skip Scorecard Deficiency Scorecard Dealer Scorecard Asset Scorecard These scorecards operate across origination, servicing, and recovery. 

2. XXXX XXXX XXXX XXXX XXXX XXXX XXXX discloses it is a leader in XXXX and XXXX using : XXXXXXXX XXXX XXXX XXXX XXXX XXXX  Decision Trees Ensemble Models Random Forest Time Series Models With continuous model training and recalibration. 

3. Auto-Decisioning Platform Proprietary XXXX-Driven Scorecard Answers within seconds Selective Funding This shows automation controls approval, pricing, and performance segmentation. 

4. Yield Optimization Controls Raised Weighted Average APRs ( portfolio strategy ) Program Average Yield Bands ( up to ~25 % ) Revenue preservation through interest margin 5. XXXX & XXXXXXXX XXXX XXXXXXXX performance modeling Early default risk prediction Cash-flow optimization for securitized pools 6. Securitization & Residual Cash-Flow Structures Securitization Trusts Residual Interest Financing Receivables measured at fair value I invoked arbitration under the contract and tendered payment in XX/XX/XXXX. XXXX failed to acknowledge or apply the tender properly and continued reporting the account as delinquent and charged off. 
XXXX later claimed that the balance was accurate and that all payments were applied correctly, despite the documentary contradiction in its own ledger. 
Regulatory Concerns Misrepresentation of account status Inaccurate credit reporting Undisclosed payment allocation practices Inflated finance charges Enforcement of a balance not supported by how payments were applied Investor disclosures that appear inconsistent with consumer disclosures This is not a simple billing dispute. It reflects systemic servicing practices that impact consumers while being framed as revenue strategy to investors.

Company response to consumer: Closed with explanation