BMW forced to repay millions to Australian car buyers

Sydney, Rabi’I 07, 1438, December 06, 2016, SPA — BMW will pay back 72 million Australian dollars (53.8
million US dollars) to car buyers in Australia who were misled into
believing they could afford the luxury German vehicles, it was reported Tuesday, according to dpa.
The finance arm of the Munich-based luxury car maker will also have to pay 5 million dollars into a community fund to educate people about finance and borrowing, the Sydney Morning Herald reported.
Australia’s corporate watchdog, the Australian Securities and Investment Commission, earlier this year found BMW Australia Finance had breached responsible lending practices.
ASIC found the company’s salesmen were rewarded with bonuses while giving loans for vehicles to people who couldn’t possibly afford to repay them.
An ASIC review of BMW Australia Finance done in August by consultants Ernst & Young found several examples of dodgy loans: A mother of ten was given a loan of 27,000 dollars even though she had negative disposable income; a 21-year-old refugee who had had a job for just one month was given 23,000 dollars; and a 76-year-old man was given 50,000 dollars – twice the value of the car.
BMW Australia Finance has already paid hundreds of thousands of dollars in penalties to ASIC over breaches of consumer protection law in its lending practices.
The Herald reported BMW Australia Finance had agreed to the massive payback as it faced the threat of a class action from an estimated 15,000 disgruntled borrowers.
–SPA
02:42 LOCAL TIME 23:42 GMT