BMW Australia ordered to pay tens of millions of dollars to misled customersStaff Writer | December 6, 2016
ASIC has accepted an Enforceable Undertaking (EU) from car financier, BMW Australia Finance, which will see the company implement Australia's largest consumer credit remediation program to compensate customers for its responsible lending failures.
Down Under BMW Finance provides motor vehicle finance to consumers
The program which is open to all of its customers under the BMW Financial Services, Mini Financial Services and Alphera Financial Services brands, will provide at least $72 million in redress for consumers made up of:
- $14.6 million in remediation payments;
- $7.6 million in interest rate reductions on current contracts;
- $50 million in loan write offs.
BMW Finance has also agreed to pay a $5 million community benefit to contribute to consumer advocacy and financial literary initiatives.
The remediation program will identify at least 15,000 customers, who between January 2011 and August 2016 may have suffered hardship as a result of BMW Finance's compliance failures, and will ensure appropriate remediation.
BMW Finance will also remove default listings and buy back all debt sold to third parties to ensure that the written-off loans are not subject to further collections activities.
The program will be overseen by an independent remediation consultant, who will periodically report to ASIC on its progress and BMW Finance's compliance with the program. ■