Auto Lenders’ Kill Switches Being Probed by U.S. Regulator

A U.S. regulator is looking at whether auto finance companies that use sophisticated technology like ignition kill switches are illegally harassing subprime borrowers that have fallen behind on their payments.

The Federal Trade Commission, a consumer protection agency, has asked for information from at least two lenders, according to securities offering documents from both companies this month obtained by Bloomberg. The probe is part of a larger investigation into subprime auto lenders’ collection practices, said a person with knowledge of the matter. A spokesman for the FTC declined to comment.

The investigation adds to the pressure that auto finance companies are already ...