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The Consumer Financial Protection Bureau (CFPB) has announced a settlement with Santander Consumer USA (SCUSA) over claims the lender did not properly disclose terms and conditions of its auto loan add-on product and auto loan extensions.

The federal agency found that SCUSA had violated the Consumer Financial Protection Act of 2010 by not properly describing the benefits and limitations of its S-GUARD GAP product, which it offered as an add-on to its auto loan products.

The finding also stated that the lender failed to properly disclose the impact on consumers of obtaining a loan extension, including by not clearly and prominently disclosing that the additional interest accrued during the extension period would be paid before any payments to principal when the consumer resumed making payments.

Under the terms of the consent order, SCUSA will provide approximately $9.29 million in restitution to certain consumers who purchased the add-on product, clearly and prominently disclose the terms of its loan extensions and the add-on product, and pay a $2.5 million civil money penalty.