Harley-Davidson Financial Services, Inc. (HDFS) has agreed to pay $228,000 to more than 600 Massachusetts consumers in order to resolve concerns that it failed to pay proper refunds under the terms of its motorcycle finance agreements, Attorney General Martha Coakley announced in June.
Under the terms of the settlement, HDFS will reimburse $228,000 to more than 600 Massachusetts borrowers. Notices and payments will be mailed to eligible borrowers in early July. HDFS will also pay $25,000 to the Commonwealth for the cost of the investigation.
“We are pleased that this finance company stepped forward to reimburse Massachusetts customers and promptly adopted changes to its procedures,” Coakley said. “We are continuing to review the practices of other motor vehicle finance companies operating in the Commonwealth to ensure compliance with contractual obligations.”
According to the assurance of discontinuance, filed in Suffolk Superior Court, HDFS allegedly didn’t always provide correct refunds of finance contract enrollment fees. Borrowers typically pay these optional enrollment fees in exchange for additional special loan terms. When borrowers pay their loans off early, they are often entitled to obtain pro-rated refunds of these fees. The refunds are customarily remitted to borrowers through the auto dealership that helped arrange their loan.