Car finance provider, BMW Australia Finance Ltd (BMW Finance) has paid penalties totalling $306,000 after ASIC found it breached important consumer protection provisions relating to the repossession of motor vehicles.
ASIC found that between January and July 2014, BMW Finance, which holds an Australian credit licence, failed or delayed in its obligations to provide customers with statutory information setting out their rights and the options available to them after a finance company repossesses a mortgaged vehicle or the consumer voluntarily returns that vehicle.
In addition, BMW Finance (through one of its repossession agents) had illegally entered onto residential property to repossess a vehicle without obtaining the required consent or authority.
These failures by BMW Finance to comply with the requirements of the law resulted in customers losing the benefit of important protections.
Repossession of secured property such as a motor vehicle has direct financial and other implications for consumers. The law therefore recognises the importance of borrowers being properly informed about their rights and options, including how to remedy any default and how they may get the vehicle back. Motor vehicles depreciate in value and a forced sale by the finance company can result in the consumer having a substantial shortfall against the amount of credit outstanding after the sale of that car.
Deputy Chairman Peter Kell said, 'As this case demonstrates, failing to comply with important consumer protection provisions can result in significant penalties.
'ASIC will continue to monitor compliance with these provisions to ensure that borrowers are not left with inflated shortfalls, and that agents are repossessing mortgaged goods within the law.'
BMW Finance is an Australian Credit Licensee that provides motor vehicle finance to consumers, directly and through a network of motor dealers.
ASIC's investigation found that between January and July 2014:
- BMW Finance's agent had illegally entered onto residential property to repossess a vehicle without obtaining consent, in contravention of s99(1) of the National Credit Code (NCC);
- BMW Finance failed or delayed in providing customers with a written notice setting out their rights, obligations and available options after repossessing a mortgaged vehicle in contravention of s102(1) of the NCC; and
- BMW Finance delayed in providing customers with a written notice setting out their rights, obligations and available options after the voluntary return of a mortgaged vehicle in contravention of s85(3) of the NCC.
Consumers who think they may be affected by the above conduct should contact BMW Finance in the first instance at firstname.lastname@example.org. If the matter cannot be resolved with BMW Finance, consumers should contact the Credit & Investments Ombudsman at www.cio.org.au.
ASIC issued 36 Infringement Notices totalling $306,000 which were paid by BMW Finance in relation to the above contraventions.
The National Consumer Credit Protection regime allows Infringement Notices to be issued for strict liability offences where ASIC has reasonable grounds to believe a person has committed an alleged offence. The payment of an infringement notice is not an admission of a contravention of the National Consumer Credit Protection Act 2009 (Cth).