ASIC Deputy Chairman, Peter Kell has called it an example of the staggering cost of poor business practices: BMW Finance, the finance arm of BMW, has been hit with an Enforceable Undertaking (EU) implement Australia’s largest consumer credit remediation program to compensate customers for its responsible lending failures.
BMW Finance provides motor vehicle finance to consumers, directly and through a network of motor vehicle dealers. The affected consumers have car loans for a wide range and variety of vehicles and car brands, both new and second hand, across three brands, being:
- BMW Financial Services,
- Mini Financial Services and
- Alphera Financial Services
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. 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.
ASIC action has BMW Finance pay $77 million in Australia’s largest consumer credit remediation program https://t.co/xSR8L6mSNL
— ASIC Media (@asicmedia) December 5, 2016
“BMW Finance had a sales-driven culture that failed to comply with the requirements of the credit laws and resulted in poor outcomes for many consumers,” said ASIC Deputy Chairman, Peter Kell.
“This is an example of the staggering cost of poor business practices and should act as a warning to other car financiers to get their houses in order.”
While more than 15,000 customers will be invited by BMW Finance to participate in the program, customers who think they might have experienced hardship as a result of entering into their loan are encouraged to immediately register for the program by calling 1800 448 225 or emailing BMW:
- BMW: CustomerFirstAUS@bmwfinance.com.au
- Alphera: CustomerFirstAUS@alphera.com.au
- MINI: CustomerFirstAUS@minifinance.com.au
— CANSTAR (@CANSTAR) August 24, 2016
The Remediation Program is designed to provide consumer redress where BMW Finance is likely to have caused hardship as a result of its failure to comply with its responsible lending obligations. Hardship can take many forms and may not have solely occurred in the consumer’s loan. For example, hardship may have materialised in the consumer’s other liabilities, such as their home loan and/or credit card.
BMW Finance will proactively contact consumers who are most likely to have suffered hardship. However, the Program is open to all consumers, who have entered into a consumer loan between 1 January 2011 and 31 August 2016, who believe they have experienced hardship as a result of BMW Finance’s lending practices.