Consumer complaint received 2026-06-02 00:00:00
Product: Vehicle loan or lease — Loan
Issue: Getting a loan or lease — Problem with signing the paperwork
Company: AMERICAN HONDA FINANCE CORP
State: CA

Complaint narrative:
I am submitting this complaint against American Honda Finance Corporation ( AHFC ) regarding the financing, subsequent servicing, and improper credit reporting of an automobile loan transaction that was originated based on materially inaccurate information, while mandatory documents were withheld, and despite my timely notice of rescission being provided before the transaction was funded. On XXXX XXXX, 2025, I signed documents for the purchase of a vehicle at XXXX of XXXX XXXX XXXX. The first version of the Credit Application was prepared by dealership employees without my participation. Subsequently, dealership employees informed me that the loan had already been approved by the bank and presented this approval as a resolved matter. The XXXXit Application itself was provided to me for the first time only during the process of signing the main transaction documents. While reviewing the Credit Application, I discovered significant errors, including an incorrect Social Security Number ( SSN ) and a fictitious city of residence, after which I pointed out these discrepancies to dealership personnel. A dealership employee corrected the form and immediately printed a second version of the Credit Application. However, upon further review, the second version also contained significant discrepancies from the information I had actually provided to the dealership. Credit Application ( XXXX ) listed a monthly income of {$14000.00} despite the fact that I had previously stated during discussions of the transaction that my monthly income was between {$6000.00} and {$8000.00}. When I raised this issue, the employee stated that it is merely a formality and does not affect anything. A particularly significant circumstance is that key documents, namely the Pre-Contract Disclosure and both versions of the Credit Application, were not included in the package of documents provided to me after completion of the transaction. These documents were first disclosed only on XXXX XXXX, 2025, by the dealerships legal representatives, XXXX XXXX XXXX ( XXXX XXXX ), as part of their official response to complaints that had been submitted to government agencies. Only after receiving both versions of the Credit Application and thoroughly reviewing their contents did I discover that other key parameters also did not correspond to the actual facts. Both versions of the Credit Application contained an incorrect employment duration and materially distorted housing obligations. My monthly housing expenses were listed as {$1500.00}, although my actual expenses were approximately {$2200.00}, a figure that I had disclosed in advance and which is confirmed by my Current Resident Lease agreement ( EXHIBIT XXXX ). The Pre-Contract Disclosure revealed additional products and services totaling approximately {$18000.00} that were not properly disclosed to me and were absent from the package of documents provided to me on the day of signing. Among these products were XXXX separate service contracts with a combined value of approximately {$8800.00}. It is also important to note that both versions of the Credit Application ( XXXX XXXX, pp. XXXX ) contain a pre-entered loan amount, which is technically impossible for a document intended for initial submission to AHFC. A credit application is a form submitted to a lender for review before any approval decision is made. At the time the Credit Application was prepared, the additional products and services that the dealership later offered during the document-signing process had not yet been finally agreed upon with me, meaning that those discussions occurred after the dealership informed me that financing approval had already been obtained. The presence of a pre-entered final financing amount in the application indicates that the structure of the transaction had been determined before negotiations and discussions of its terms with me had concluded. The document was prepared as though the loan terms had already been finalized, even though the application was supposedly only being prepared for submission to AHFC. Furthermore, the absence of the XXXX XXXX and both versions of the XXXX XXXX deprived me of the opportunity to identify additional discrepancies and dispute them before financing was completed. Only after receiving these documents approximately 45 days later was I able to determine the full extent of the inconsistencies between the information I actually provided to the dealership and the information used in the credit documentation. The financial terms of the transaction also raise serious concerns. The manufacturers suggested retail price ( MSRP ) of the vehicle was {$47000.00} ( EXHIBIT XXXX ), while the vehicle price in the contract was increased to {$65000.00}. I was not shown any additional price stickers, dealer addendum stickers affixed to the vehicle, or any other official disclosures explaining the increase of the vehicle price to that amount. At the same time, additional products and service contracts totaling approximately {$18000.00} were listed separately on top of the vehicle price. The total amount financed was {$90000.00} before interest. A substantial discrepancy was also identified regarding the mileage of the vehicle traded in as part of the transaction. According to service records ( EXHIBIT XXXX ), shortly before the transaction the vehicles mileage exceeded XXXX miles, and at the time of the transaction the contract ( EXHIBIT XXXX, p. XXXX ) reflected approximately XXXX miles. However, the transaction documents listed the mileage as XXXX miles. This matter is currently the subject of a separate official XXXX investigation. At the same time, the dealership significantly undervalued my trade-in vehicle. According to the independent XXXX XXXX XXXX XXXX XXXX Report ( EXHIBIT XXXX ), its value ranged from {$25000.00} to {$27000.00}. Nevertheless, the dealership valued it at {$20000.00} despite the fact that the outstanding loan balance on that vehicle was approximately {$23000.00}. Thus, the dealership simultaneously inflated the price of the vehicle being sold and undervalued the vehicle being traded in, creating a negative equity amount and adding it to an already inflated financing calculation. Another significant violation concerns the insurance process for the vehicle. Before the transaction was finalized, I expressly informed a dealership employee that my insurance agent did not work on XXXX and that the new vehicle could not be added to my insurance policy on the day of the transaction. In response, the dealership employee informed me that this was not a problem and that the insurance could be arranged later. At the time of the transaction, the dealership possessed only the insurance policy covering the vehicle being traded in. A dealership employee photographed that insurance policy using a mobile phone despite the fact that the policy applied exclusively to the trade-in vehicle and contained no information regarding the vehicle being purchased. At the time the new vehicle was delivered, there was no active insurance policy in the insurance system covering that vehicle, as confirmed by XXXX XXXX documentation ( EXHIBIT XXXX ). Accordingly, the vehicle was delivered to me without confirmed insurance coverage at the time of delivery. These circumstances raise serious questions regarding what information and documents were used during the origination and subsequent financing of the transaction, because the only insurance policy in the dealerships possession related to a different vehicle, while no active insurance coverage existed for the vehicle being purchased at the time it was delivered. After discovering these violations, I immediately returned to the dealership and demanded that the transaction be fully rescinded or revised, but my request was denied. On XXXX XXXX, 2025, before financing was completed by the lender, I sent written Notices of Rescission by certified XXXX mail to both the dealership and AHFC, formally withdrawing my consent to the transaction. Despite receiving written notice that the transaction was being formally disputed and should be rescinded before funding, AHFC proceeded to fund the loan in the amount of {$90000.00}. Additional concern arises from AHFCs conduct after funding the transaction. On XXXX XXXX, 2025, AHFC sent me an official letter ( EXHIBIT XXXX ) stating that it was unable to locate or verify my account based on the information available and requested additional identifying information, including the account number, the last XXXX digits of my SSN, and the vehicle VIN. However, one day earlier AHFC had already assigned an account number to the loan, generated a monthly statement, established a payment schedule, and issued the first payment due under the contract ( EXHIBIT XXXX ). This contradiction raises serious questions regarding the customer identification and verification procedures ( KYC/CIP ) XXXXtilized by AHFC in reviewing the credit application and subsequently servicing the account. To the best of my knowledge, neither before nor after funding did AHFC make any attempt to contact me to verify my identity, confirm personal information, or conduct any additional verification, despite establishing a long-term credit obligation in a substantial amount. After I refused to recognize the validity of this debt, AHFC reported the account to the credit bureaus as a charge-off/collection account with a balance of {$91000.00}. I submitted formal disputes to the credit bureaus and provided supporting documentation, including the Notices of Rescission, proof of delivery, and materials from ongoing government investigations. Despite this, XXXXHFC continued to verify the accuracy of the debt and maintain negative information in my credit history. I respectfully request that CFPB conduct a comprehensive investigation into the actions of American Honda Finance Corporation, determine what information was used in evaluating the financing request, identify which version of the Credit Application was used in approving the loan, determine how the accuracy of the information contained in the credit application was verified, and explain why financing was completed after Notices of Rescission had been received. I further request that AHFC be required to provide the complete set of documents used in making the credit decision, completely cease all collection activity relating to the disputed debt, cancel the account to a XXXX balance, and issue an official demand to the credit bureaus for the complete deletion of the entire negative tradeline associated with this account from my credit history.

Company response to consumer: Closed with explanation