More than $1 million to be refunded to BMW finance customers
The Australian Securities and Investments Commission (ASIC) has announced that more than 2400 consumers will be refunded a total of $1,392,667 by BMW Australia Finance Limited following a breach of the National Credit Code by the car financier.
In 2011, BMW Finance notified ASIC that it had been extending credit to car buyers to pay for tyre and rim insurance premiums where the period of that insurance was for three years.
The National Credit Code prohibits lenders financing those premiums where the insurance is for a period longer than 12 months. Buying and financing insurance for more than one year in advance has a number of drawbacks for consumers, including paying interest on premiums not yet due, and being 'signed-up' with one insurer for a long period.
As a result of this breach, ASIC is undertaking an industry-wide review of the financing of tyre and rim insurance premiums to ensure compliance with the National Credit Code and its predecessor the Uniform Consumer Credit Code.
BMW Finance has implemented a process to refund the financed premiums for customers, whilst allowing the consumers to retain the benefit of the policy.