BMW has to pay $77 million AUD ($57 million) as compensation to Australian customers who took loans they couldn’t afford, according to the country’s corporate regulator.
This is Australia’s largest ever consumer credit remediation program Reuters reports. The payments will compensate at least 15,000 customers who may have suffered hardship between January 2011 and August 2016 thanks to loans received from BMW Australia Finance Limited, according to a statement issued by the Australian Securities & Investment Commission (ASIC).
The largest part of the fine, $50 million AUD will be used to write off loans while smaller sums will be used for compensation, interest rate reductions on existing loans and initiatives to improve consumers’ financial health.
“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.
BMW has confirmed the news and said its Australian financing unit has been working with the regulator to ensure that their processes complied with the local laws.
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