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CFPB announced yesterday that Herbies Auto Sales, a used-car dealer, will pay $700,000 in restitution to consumers and a $100,000 penalty for abusive financing schemes, hiding finance charges and misleading consumers.

Y King S Corp., which does business as Herbies Auto Sales in Greeley, Colo., operates as a subprime, buy-here, pay-here dealer. The dealer both sells the vehicle and does the financing without selling the loan to a third party. CFPB found that Herbies unlawfully advertised a misleadingly low 9.99 percent annual percentage rate without disclosing a required warranty, a payment reminder device and other credit costs as finance charges.

Herbies violated the Truth in Lending Act and the Dodd-Frank Act. Specifically, CFPB found that the company hid finance charges and advertised a false APR, hid finance charges by not negotiating car prices with credit customers (only cash customers) and used abusive practices.

Herbies must provide $700,000 in restitutions for those consumers who financed cars with the dealer after Jan. 1, 2012, and must pay a civil penalty of $100,000. The company must also stop deceiving consumers during the financing process, post automobile prices and provide certain financing information in advance to consumers.