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Citi Sold My Vehicle Loan to Santander

Daniel Cohen
UpdatedSep 19, 2010
Key Takeaways:
  • Review your options if your auto loan is sold to a new lender.
  • Understand that the original terms of your loan remain in place with the new lender.
  • Consider refinancing if you do not want to work with the new lender.

My car loan was sold to a new lender without my permission. Is that legal?

I have an auto loan with Citifinancial. Today I received a phone call from Santander Consumer USA. They informed me that they have purchased Citifinancial Auto and have taken over all existing loans. I was then informed that I need to sign a new loan agreement. I knew nothing of this supposed buy-out and refused to give any personal information over the phone. After some research I discovered that Santander Consumer USA in fact HAS purchased Citifinancial Auto. The fact that Citifinancial never informed me that my note was being sold and this new company that I have never heard of has my personal information and is requesting that I modify my existing auto loan to fit their needs DOES NOT sit well with me. This whole thing has an illegal feel to it...unethical at the very least. I did not agree to do business with Santander. Can they do this? What are my options?

Santander Banco, one of Spain's and the world's largest banks, purchased a significant portion of Citigroup's auto loan portfolio. Santander did not buy all of Citi's auto loans, but your loan is apparently one in the portfolio it did buy.

Normally, when a loan is bought, the original servicer notifies the borrower as a matter of common courtesy. It tells you the loan was sold, who your new lender is, and where you will now be sending payments. In your case, it is understandable you were a taken aback by being contacted out of the blue by a party you have never heard of. After all, who in the US outside of the banking business has ever heard of Santander? Still, Citi and Santander's rude behavior does not mean anything improper occurred.

It was not illegal for Citi to sell your loan. The terms of your loan did not change when Citi assigned or sold the loan the Santander. Santander assumed all terms and conditions of your Citi loan, and it would be illegal for Santander to change your interest rate or the monthly payment required unilaterally. You stated the loan was modified, but I am not clear what you meant by that, and which terms or conditions changed.

Customarily, when a new creditor assumes a loan, it does not ask the debtor to sign a new or agreement. One of the reasons it is buying a loan is because the loan's history, risks, and expected return are known or easy to project. It baffles me Santander would risk losing you (and presumably other customers) by asking you to sign new loan agreements, which will almost certainly prompt many customers to shop around for better rates and terms.

What I am about to write is purely speculation, but perhaps the terms of your Citi loan are such that Santander believes it cannot make money on your loan, and would not mind losing you if you take your business elsewhere.

If you do not wish to do business with Santander, refinance your vehicle loan. Refinancing may not make sense if you are already years into the loan, because you will have paid off most of the interest on the loan at that time.

Alternatively, refuse to sign Santander's agreement. You are under no obligation to say yes to Santander's request to accept different terms and conditions.

I encourage you to read some useful information about auto loans that will help you compare and contrast terms and conditions of vehicle loans.

I hope this information helps you Find. Learn & Save.




LLiz, Mar, 2012
Have you already talked with your servicer? maybe they have specific reasons of letting your car be bought by Santander. Sometimes this happens and the borrower is unaware of it. Proper counseling is the best solution for it, talk to your servicer immediately.
EErick, Nov, 2011
If your loan is sold to another company what you should do is validate that debt. What I means is this is the land of contracts and if I do not have a contract with you then I don't owe you. I don't care if you purchased several loans of mine if you purchased them then you have paid my debt. A company has to have a signed contract with you stating that you requested some type of service from them and that it was worth x amount of Federal Reserve Notes. Without a contract they have not a valid claim.
BBill, Nov, 2011
It is fair to say most US courts respect the terms and conditions of valid, reasonable contracts. It is also fair to say that absent a no-assignments clause in a contract, a party to a contract may assign its rights to a contract to a third party. For example, an over-booked house painter may subcontract or assign a house painting contract to another house painter. Similarly and to your point, an original creditor may sell a collection account to a collection agent. In the legal trade, this is called an assignment. A collection agent that validates a debt provides evidence it has the legal right to collect a debt.

Your statement "...if I do not have a contract with you then I don't owe you," is accurate to a degree, but not accurate if the collection agent possesses an assignment it can validate.
sshirley, Oct, 2011
HSBC sold our car loan to Santander 1 year ago. There has been nothing but problems. This car was always current. They said it was one payment behind, $330.00. I told them no after paying for this car for 4 years. November payment, No. 72, last payment should be $330.00. They told me today, October 24, 20aa, I still owe $2414.00 for interest. My husband flipped out on them today. Tomorrow, he's calling our attorney.
KKelly, Nov, 2011
HSBC sold mine to Santander also. I called for a payoff quote in January of this year. They told me I owed $6063. My loan was for 60 months and I was to make my last payment on September 9th, 2011. I got a letter in the mail last week saying they are scheduling my car for repossession and I was behind $1743! I called to talk to them and never did get a real person. I did however get another payoff quote (Automated).... Now they say I owe $3893??!! My last payment was supposed to be in September of this year! How do I still owe this much????!! My payoff is different everyday. I don't know what to do.
SStephen, Sep, 2011
My Sovereign loan was sold to these henchmen. Trying to get my insurance check for accident cashed at Sovereign- told they are not authorized even though Sovereign is under Santander.Have to send check to Santander, get repairs, have body shop send them the repair list and they will then send the check to atuo body. If repair is less they take the difference and apply to principal. This is the most convoluterd assinine process.They are not available in person- no brick and mortar bldgs, only internet.Their attitude is arrogant and condescending.Unfortunately, there is nothing we as a customer/consumer can do.