Consumer complaint received 2025-02-05 00:00:00
Product: Vehicle loan or lease — Loan
Issue: Managing the loan or lease — Billing problem
Company: BMW Financial Services NA, LLC
State: CA

Complaint narrative:
**Formal Complaint to the CFPB** **Subject : Unlawful Sale of Account Receivables & Improper Accounting of Promissory Note Proceeds** **Account Number : XXXX **To : **XX/XX/XXXXBMW Financial Services **XXXX2025 **To Whom It May Concern, ** This is a formal complaint against **BMW Financial Services** for their unlawful and deceptive practices related to the sale and securitization of account receivables and their failure to properly apply proceeds from negotiable instruments, including the promissory note I originally issued, to offset the vehicle purchase balance. The following points outline my claims, supported by the applicable **Uniform Commercial Code ( UCC ), federal consumer protection laws, and other relevant regulations**.

# # # **1. Consumer as the Original Creditor & BMW Financial as the Debtor** Under established financial and legal principles, the party who signs a **negotiable instrument** ( i.e., a promissory note or security agreement ) is considered the **issuer and original creditor**, as my signature created the financial obligation. **BMW Financial Services** received my executed promissory note and subsequently sold or transferred this instrument for value, making them the debtor in this transaction.

- **UCC 3-104** defines a **negotiable instrument** as an unconditional promise to pay a fixed amount, signed by the maker. My executed contract serves as such an instrument.

- **UCC 3-105 ( a ) ** states that issuance of a negotiable instrument is completed when delivered by the maker for the purpose of transferring rights to another. My signed contract facilitated the transaction and was subsequently monetized.

- **UCC 3-306** protects issuers ( i.e., me ) when the instrument is sold or transferred without proper authorization or notice.

Since **BMW Financial Services** monetized my note and assigned it to third-party investors or trusts, the proceeds from such transactions must be used to **offset the balance of the alleged debt**, in accordance with consumer credit laws and accounting standards.

# # # **2. Unlawful Sale of Account Receivables & Failure to Offset the Account Balance** BMW Financial Services unlawfully securitized and sold my **account receivables** without my knowledge, consent, or proper application of the proceeds.

- **UCC 9-203 ( b ) ( 2 ) ** requires that a debtor ( i.e., me ) must authenticate a security agreement before a secured party ( BMW Financial Services ) can sell or transfer the rights to receivables.

- **12 CFR 226.36 ( c ) ** prohibits deceptive creditor practices, including the **unauthorized sale or transfer of credit rights** without disclosure.

- **15 U.S.C. 1666h ( Truth in Lending Act - TILA ) ** requires that when a creditor derives monetary benefit from securitizing receivables, those proceeds must be **used to offset the original account balance. ** Since **BMW Financial sold my obligation to investors** while continuing to demand payments from me, they engaged in **double-dipping**, an unfair and deceptive practice in violation of consumer protection laws.

# # # **3. Failure to Provide the Original Promissory Note & Accounting Records** BMW Financial has refused or failed to produce the **original promissory note** or an accurate accounting ledger showing how payments were applied after monetizing the receivables.

- **UCC 3-501** grants the right to demand presentment of the original note.

- **15 U.S.C. 1692g** ( Fair Debt Collection Practices Act - FDCPA ) requires that a creditor must verify the debt upon request, including providing original documents proving the claim.

- **15 U.S.C. 1681s-2** ( Fair Credit Reporting Act - FCRA ) prohibits creditors from reporting inaccurate debt information when they fail to provide proper verification.

Failure to provide the original note raises concerns regarding BMW Financials **standing to collect payments** or report negative credit information, as they likely transferred the debt to another entity.

# # # **4. Violations of Treasury Regulations & Payment Processing Rules** The **Treasury Financial Manual ( TFM ) ** outlines the handling of remittance instruments and account reconciliation. BMW Financials failure to process remittance coupons or offset balances violates these provisions : - **TFM , Part 5, Chapter 3000, Section 3035** mandates that **remittance instruments** ( such as promissory notes ) must be properly recorded and applied as payments or credits to the associated account.

- **31 U.S.C . 5118 ( d ) ( 2 ) ** allows for obligations, including promissory notes, to be used for settlement of debts.

# # # **5. BMW Financials Deceptive & Unfair Practices** BMW Financials **continued demand for payments** after monetizing my account receivables constitutes **fraudulent misrepresentation** and violations of : - **15 U.S.C. 45 ( a ) ** ( FTC Act ) prohibiting **unfair and deceptive trade practices**.

- **16 CFR 444.2** ( Unfair Credit Practices ) barring creditors from collecting on accounts where they have already received payment through third-party sales.

- **UCC 3-305** ( Defenses & Claims in Recoupment ) allowing a party to assert that the obligation has been **discharged by prior payment.

**Conclusion** BMW Financial Services has engaged in **deceptive, unlawful, and fraudulent practices** by failing to properly disclose the sale of my promissory note and refusing to apply proceeds to offset my alleged balance. These actions violate federal regulations, UCC statutes, and consumer protection laws.

I request **immediate investigation and enforcement action by the CFPB** to hold BMW Financial accountable for their unlawful conduct and to ensure that all illegally collected payments are refunded or applied properly.

If BMW Financial fails to comply, I reserve the right to pursue further legal action and submit formal complaints to **the Federal Trade Commission ( FTC ), the Office of the Comptroller of the Currency ( OCC ), and the U.S. Department of the Treasury .

Company response to consumer: Closed with explanation