Huntington Bank Auto loan shady practice.

[willswim]

We took our son in January to purchase his first new car a Jeep Grand Cherokee. He has good credit and a good job and had no problems getting financed with Huntington Bank which was set up by the dealership. The day we picked up his vehicle we had our auto insurance fax the doc page to the dealership to prove full coverage on the vehicle.

Huntington provides a payment book rather than a monthly statement and my son made his first payment in March with an extra $100 toward principle and did the same thing in April by their automated phone payment system. I encouraged him to set up an online account with them so he could see when his payments posted, balance, etc. Thank goodness he did because the first payment showed  $176 applied to interest, 0 to principle and $324 applied to "other". The April payment showed $136 applied to interest, $184 to principle, and $180 to "other". He called and found out Huntington claimed to have no knowledge of his auto insurance and had purchased full coverage on the vehicle and even though he was paying an extra $100 a month to pay down principle they had diverted $504 towards extremely high insurance. He has since had our insurance refax proof of coverage and Huntington says in the next week he "should" receive an adjustment and have the money applied to his principle, but the customer service rep wasn't sure he would be credited the entire $504 or a lesser amount. What?!!! They never called or sent a letter asking for proof of insurance and if my son hadn't set up the online account this could have gone on for months or years without him knowing. I feel like this is rather shady and it has left a sour taste in my mouth toward Huntington Bank. Just wanted to share his experience.

[Appleman]

Thanks for sharing the experience of your son. It would seem an email, phone call or even a letter would be a good way to contact a customer if something were needed.

[StartingOver10]

I have been reading more and more about banks/lenders charging forced placed insurance on autos and homes when the consumer already has proper coverage. 

We all know that this type of insurance is extremely expensive and represents a large profit center for the bank/lender.

If I were in your son's shoes, I would gather up all of my documentation and report this deceptive practice to every agency and consumer watchdog out there. Who knows, there may even already be a civil lawsuit against Huntington Bank, or other lender,  for this practice.

Thank you OP for bringing it to light here so others will check their own loans to make sure they aren't being charged for forced placed insurance.  

[Anonymous]

The fine print of all of those contracts says its is your responsibiity to provide them with proof of insurance, I am sure the dealer took that information however you cannot really rely upon them to do this for you because most times the actual vehicle is not identified on the proof the lender needs.  You cannot really blame the lender for protecting their asset and the reason the rate is so high is because of the nature of the policy (any driver versus a specific driver).  It is surprising they didn't send a letter or email.  I don't see anything shady here.  

[Anonymous]

Another thing to note is that your insurance coverage must also be within the lender's requirements...For example most national lenders requires comp/collision deductibles of $500 or less. Any deductible amount over $500 is not in the best interest of the finance company because their collatoral is at higher risk to damages as a high deductible often correlates to not getting damage's repaired. This is often a reason why finance companies place force-place insurance on vehicles.

[willswim]

What I consider shady is the lack of communication. We provided the dealership the doc page from our auto insurance showing full coverage on the vehicle and a deductible of $500. I have had multiple auto loans over my lifetime with multiple banks financing them and not one has ever placed forced auto insuance on the loan. If they didn't receive proof of insurance then, yes I expect them to contact the customer and ask for it. They certainly would have contacted the customer if the payment were missed. My son is a first time car buyer and most do not realize that this type of issue can occur and therefore they are at a disadvantage, which is why I was sharing his experience so others could be made aware.

[Anonymous]

Have him try and refi with DCU or NFCU.