Do you qualify for reimbursement?
ASIC in their crackdowns on shonky lending practices has ordered some lenders to refund clients.
Read this to see if it applies to you and take note of why it has happened so it does not happen to you when you are applying for vehicle finance.
BMW Finance Compensation
ASIC recently took action against BMW Australia Finance (BMW Finance) for signing up customers to car loans they could not afford between 1 January 2011 and 31 August 2016. BMW Finance has agreed to compensate customers who took out unsuitable loans during this period.
You could be entitled to compensation if you:
- obtained a car loan from any brand under the banner BMW Financial Services, Mini Financial Services or Alphera Financial Services between 1 January 2011 and 31 August 2016, and
- suffered some form of hardship as a result of entering into the car loan.
By contacting BMW Finance and registering for the compensation program, you will be able to discuss any possible compensation.
And what are the signs that would make you eligible?
Here are some signs that you may not have been able to afford your car loan and you might be entitled to compensation:
- your expenses consistently exceeded your income
- there were many reversals of payments and dishonour fees on your bank statement
- your bank account was regularly overdrawn
- you relied on other forms of credit to manage your repayments, or you had to obtain more credit since you got the loan
- you could not meet other expenses, such as electricity bills or rent
- most or all of your income was going on loan repayments on or around your payday
- you withdrew all or most of your income on or around the day you were paid.
Hardship can take many forms. Even if you didn't miss a repayment on your loan, you may still have suffered hardship as a result of getting that loan. By registering for the compensation program, you will be able to discuss any hardship you experienced because of your loan.
Motor Finance Wizard
ASIC has taken action against Motor Finance Wizard for not checking the income and expenses of customers before signing them up for a car lease or loan. This means some customers have received a lease or loan that they could not afford.
Here we explain who is entitled to a refund and what you can do if you think you are due a refund from Motor Finance Wizard.
You could be entitled to compensation if you:
You may be entitled to a refund or write-off of your loan or lease if you signed up for a lease or loan from Motor Finance Wizard between 1 July 2010 and 16 July 2014.
Motor Finance Wizard will be re-assessing loans and leases taken out in this period and will be writing to customers who are eligible for a refund.
If you signed up for a car lease or loan with Motor Finance Wizard during this period you should contact them on 13 22 75 to see if you are due a refund or write-off.
Cash Converters
ASIC took action against Cash Converters for failing to make reasonable inquiries into people's income and expenses before signing them up for payday loans between 1 July 2013 and 1 June 2016. As a result of this action, Cash Converters had to refund $10.8 million to consumers who took out loans in this period that were unsuitable for them.
You could be entitled to compensation if you:
If you received a Cash Converters loan between 1 July 2013 and 1 June 2016, you may be entitled to a refund if any of the following situations apply to you:
You got your loan online and already had two or more payday loans
If this is your situation, Cash Converters has already agreed to refund some of the fees they charged you. They have now refunded most consumers under this remediation program, however, if you weren't able to be contacted and missed out on a refund, don't worry. You can still access your refund by lodging a free complaint with the Credit and Investments Ombudsman or go directly to Cash Converters and ask for your refund.
You got your loan online or instore and it was your first payday loan
If your first payday loan was from a Cash Converters store or their website, and you think they shouldn't have given it to you because you couldn't afford it, you can lodge a complaint with the Credit and Investments Ombudsman seeking a refund of the fees and charges you paid.
You got your loan instore and already had two or more payday loans
If you already had two or more loans before you got your loan through a Cash Converters store, they shouldn't have given you a loan unless they can prove you could afford it. If you think you could not afford the loan, you can lodge a complaint with the Credit and Investments Ombudsman to apply for a refund of all your fees and charges.
Responsible lending
At National Fleet Finance we care for the well-being of our customers and we endorse and support the responsible lending code practiced by our lenders.
There are many different ways to practice responsible lending and they can include:
- Choosing a vehicle of a lower more affordable price
- Choosing a loan or lease that provides you with more flexibility
- Talking with your accountant to see if the loan, finance or lease is in your best interest and if the payment structure is suitable
- Taking a longer term or providing a deposit or residual so the repayments are within your budget
Rather than just submitting to a computer or online service we suggest ringing or emailing and talking to a real person that has your best interests and continued patronage as part of their ethical business practice.
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Our Customers
National Fleet Finance: Lenders must practice responsible lending to customers, checking carefully that a loan will not put the customer in a position of financial hardship.
Quite often our customers will complain when we cannot get them approved for the amount they would like but it is often in their best interest that a vehicle of lesser price is chosen, or a time period is waited till financial circumstances improve.
You should not be upset that a lender, or our responsible lending practices, give you advice you sometimes do not want to hear and you should be suspicious of lenders that make it too easy when others won’t lend an amount to you. It is often in your best interests.
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