Credit regulator orders VW to refund customers ‘on-the-road fees’
Volkswagen (VW) must refund customers "on-the-road fees" and other charges added to its vehicle finance agreements, the National Credit Regulator said on Tuesday.
This echoed a similar statement the regulator issued to BMW Financial Services SA on October 6.
The regulator accused both car companies of sneaking hidden fees into the small print of their vehicle finance deals, and indicated other lenders are likely to receive similar notices as its investigation continues.
Besides "on-the-road fees", the regulator also ordered the vehicle financing arms of VW and BMW to refund admin and handling fees.
"Credit providers are reminded that it is a criminal offence to charge consumers fees and charges that are prohibited by the National Credit Amendment Act of March 2014," the regulator said in its statement.
"The National Credit Act allows consumers to be given a quotation which sets out the cost of credit before signing credit agreements," National Credit Regulator CEO Nomsa Motshegare said in both the statements to VW and to BMW.
"Consumers should request this quotation from their credit providers so that they can properly check the cost of credit that is being offered",
BMW said it intended challenging the regulator’s order to refund its customers.
"The ‘on-the-road fee’ is a fee agreed to between the dealer and the consumer," BMW said.