The Consumer Financial Protection Bureau (CFPB) released a special edition of its Supervisory Highlights this week. A portion focused on a topic that industry experts such as Allied Solutions cautioned finance companies about navigating carefully.

The report delved into ancillary product refunds, especially when a vehicle is repossessed. The CFPB said its examiners again found that contract servicers continued to charge fees for add-on products like guaranteed asset protection (GAP) insurance that the regulator said no longer offered any value when consumers paid off their contract early or had their vehicle repossessed.

The situation fell within what the bureau is calling “illegal junk fees.” The regulator highlighted in this report that the result of the CFPB’s supervisory work companies from many segments of financial services including automotive are refunding $140 million to consumers, $120 million of which is for “surprise overdraft fees and double-dipping on non-sufficient funds fees.”

When CFPB examiners uncover problems, the bureau said they share their findings with companies to help them remediate violations. Typically, as with many of the instances identified within this new report, the bureau said companies take actions to fix the identified problems.

For more serious violations or when companies fail to take corrective actions, the CFPB opens investigations for potential enforcement actions.

“The CFPB continues to uncover junk fee scams that violate the law and undermine consumer trust,” CFPB director Rohit Chopra said in a news release. “We will continue to combat the illegal fees cropping up in consumer finance markets.”

To help auto finance companies avoid CFPB enforcement, SubPrime Auto Finance News hosted a free informational webinar with Allied Solution. A recording of that session can be viewed below.