BMW pays for breaching National Credit Code
BMW has paid the price of breaching the National Credit Code, with the Australian Securities and Investments Commission (ASIC) ordering the company to reimburse 2,400 customers $1,392.667.
The breach involved extending credit to car buyers to pay for tyre and rim insurance premiums where the period of insurance was three years. The code does not allow the financing of those premiums for longer than 12 months.
In response, ASIC will conduct an industry-wide review of the financing of tyre and rim insurance premiums to ensure compliance with the National Credit Code.
ASIC said buying and financing insurance for more than one year in advance had a number of draw-backs for customers, including paying interest on premiums not due and being stuck with one insurer for a long period.
ASIC Commissioner Peter Kell said it would ensure consumers were refunded the premium in full where a breach of the legislation occurs.
ASIC acknowledged BMW's compliance and work towards refunding financed premiums while keeping the policies in place for customers.
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