Consumer complaint received 2026-05-18 00:00:00
Product: Vehicle loan or lease — Loan
Issue: Managing the loan or lease — Billing problem
Company: ALLY FINANCIAL INC.
State: NY

Complaint narrative:
This complaint is filed jointly by the primary borrower and the co-signer of an Ally Financial auto loan dated XX/XX/XXXX. The loan was for approximately {$34000.00} financed at 13.94 percent APR for 84 months at {$650.00} per month, secured by a XXXX XXXX XXXX XXXX. Shortly after origination, two add-on products ( a XXXX XXXX XXXX XXXX for {$2800.00} and an XXXX XXXX XXXX XXXX for {$1200.00} ) were canceled. The originating dealership processed the cancellations and issued a check dated XX/XX/XXXX in the amount of {$4100.00} payable to Ally Financial. The check stub clearly designated the funds as cancellation refund proceeds intended to reduce the loan principal. Ally Financial received the check but mishandled it. According to Allys own official Payment History letter dated XX/XX/XXXX, Ally applied {$4000.00} to principal and diverted {$92.00} to finance charges, contrary to the checks designation. The same transaction was logged in Allys customer app with the description unknown, despite the check stub clearly identifying its purpose. Allys system then performed repeated internal Reallocations that spread the cancellation refund across future scheduled payments instead of treating it as a one-time principal reduction. The result was that Ally generated and delivered seven consecutive monthly billing statements ( XX/XX/XXXX through XX/XX/XXXX ) showing Amount Due : {$0.00} and Statement Total : {$0.00}. Voluntary payments were made during this period because the borrowers knew the loan still existed. Beginning with the XX/XX/XXXX statement, billing returned to non-XXXX amounts and regular monthly payments resumed. However, according to Allys own official Payment History letter, five of the last six consumer payments ( XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, and XX/XX/XXXX ), totaling {$3000.00}, were applied 100 percent to finance charges with {$0.00} applied to principal. On a properly amortized simple interest installment loan, this is inconsistent with how the loan was supposed to be administered under the terms of the contract. Compounding the misapplication, Ally is reporting different balances to the consumer and to the credit bureaus on the same date. As of late XX/XX/XXXX, the Ally app showed an outstanding balance of {$30000.00} while the credit bureaus were reporting {$31000.00}, a {$1500.00} discrepancy between Allys own records on the same date. After dispute letters were sent in late XX/XX/XXXX, the bureau-reported balance dropped to {$30000.00} ( a {$950.00} reduction far larger than a normal monthly payment would produce on this balance ) while the Ally app figure has not changed. Ally appears to be making piecemeal bureau-side adjustments without correcting the underlying internal account. Based on the math, the correct outstanding balance as of late XX/XX/XXXX should be approximately {$28000.00}. Ally has collected approximately {$1300.00} in finance charges that were not owed under the terms of the contract, and this excess grows each month the misapplication remains uncorrected. The inflated payoff figure is also blocking the sale of the vehicle. There is a documented {$21000.00} buyer offer, but no buyer will close when the lenders quoted payoff does not match what the math supports. Direct resolution was attempted before filing this complaint. Formal letters were sent by certified mail to Ally Financial and to all three credit bureaus. On XX/XX/XXXX, Allys Executive Customer Relations team acknowledged receipt and assigned a file number, stating only that they are researching the concerns without addressing any of the substantive points. On XX/XX/XXXX, XXXX acknowledged the bureau dispute and opened the statutory investigation under the Fair Credit Reporting Act. During the active dispute period, Ally has continued making bureau-side adjustments without addressing the underlying account. The conduct described is consistent with a documented pattern of consumer complaints against Ally Financial involving similar servicing and credit reporting issues, including complaints filed with the CFPB and lawsuits that have proceeded against Ally in federal court. The requested relief is correction of the outstanding balance to reflect proper application of the cancellation refund, refund of excess finance charges collected, alignment of credit bureau reporting with Allys own internal records, and issuance of a corrected payoff statement that reflects the accurate balance. Supporting documents are available, including Allys official Payment History letter, the cancellation refund check with itemized stub, monthly billing statements showing {$0.00} due, Ally app screenshots, credit bureau screenshots, and Allys acknowledgment correspondence.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation