Refunds due: VW financers' 'on the road, admin and handling fee' unlawful

08 April 2019 - 13:27 By Iavan Pijoos
Vehicles line up to catch the customer’s eye at a car dealership.
Vehicles line up to catch the customer’s eye at a car dealership.
Image: Reuters

The road, admin and handling fees charged by Volkswagen Financial Services South Africa on consumer credit agreements is unlawful, the National Consumer Tribunal ruled on Monday.

The National Credit Regulator (NCR) had issued a compliance notice to the car financer in 2017. The notice instructed VW Financial Services SA to refund consumers and submit an audit report to the regulator.

The tribunal found that the fees were not permitted to be charged on credit agreements by the National Credit Act.

The tribunal ordered the car financer to:

• Cease to charge consumers "on the road" admin and handling fees on credit agreements from April 10 2019 and to submit written confirmation to the NCR to this effect.

• Calculate the total charges, fees or interest levied on the "on the road", admin and handling fees; and

• Refund all those consumer charges, fees or interest levied and submit a report by independent auditors to the NCR.

NCR CEO Nomsa Motshegare welcomed the judgment, saying it "affirms the protection given to consumers by the National Credit Act against illegal charges and fees on credit agreements".

Volkswagen Financial Services South Africa said it was “reviewing the ruling and obtaining legal advice. We shall revert in due course."


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