Tuesday, December 6, 2016

Penalty payment – BMW will have to pay in Australia, 50 million Euro penalty Süddeutsche.de


  • BMW loans to customers who could not afford the cars, the manufacturer actually does.
  • about 15 000 customers are Affected in Australia.
  • lending in The automotive industry is criticised frequently. In the United States, some experts even fear that soon a large credit bubble could burst.

The German car manufacturer BMW have to pay in Australia, the equivalent of 50 million Euro penalty because the company should have given improper loans to car buyers. The buyer would get the money, even though they could not afford the purchase of a new car and the credit obviously does not pay back. It was the largest restitution program for consumer loans in Australia, explained to the competent Supervisory authority Australian Securities and Investment Commission (ASIC) in a communication.

in addition to the penalty payment BMW needs to provide around 3.5 million Euro for a variety of educational programs, the consumer in dealing with money and credit to schools. The company is BMW Finance should have advised many customers incorrectly, as a study showed. A 21-year-old man got a credit in the amount of 23 000 Australian dollars (about 16 000 euros), although he could only have a Job for the next month. Another man got a loan of 50 000 Australian Dollar – in the car, he wanted to buy was only half as much value.

bad loans are in the auto industry is no exception

at least 15 000 customers, to have suffered between January 2011 and August 2016 due to breaches of Australian consumer protection rules disadvantages are Affected to the specifications of the ASIC. A large part of the penalty for the BMW consists of depreciation on the questionable loans, many customers do not need to pay back. BMW Finance will also need to remove customer names from a database, in which defaulting borrowers can be registered. The penalty reductions in interest rates for existing loans and repayments in the amount of ten million euros.

The questionable lending to the car buyer is international, more and more in the focus. Thus, the volume of the car has grown loans in the United States in recent years. Including many so-called sub-Prime-credit, second-rate loans are awarded to customers with poor credit. The risk of not being paid back is higher than the normal loans.

“The total number of sub-Prime lending has now reached a Ten-year High, a level as before the financial crisis,” a study of the US Central Bank, the Fed. Some experts fear that a new credit bubble forming, to burst, if many customers are not able to pay back their car loans.

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