A class action has been filed against Toyota Finance Australia, claiming it paid commissions to dealers that set higher interest rates above the base rate – a practice that was previously outlawed by authorities.
Toyota’s financial division is facing a class-action lawsuit in Australia over allegations it breached financial regulations.
According to website Lawyerly, Toyota allegedly allowed its dealers to set a higher interest rate on car loans above a base interest rate set by Toyota Finance, with the difference reportedly paid back to the dealers as ‘flex commissions’.
It’s alleged customers were not told the interest rate or loan term had been set by the dealers.
Lead plaintiff Belinda Jenner, represented by Echo Law, claims the financial commission “provided an incentive” and created “self-interest,” which the lawsuit claims created “unfairness” for consumers, court documents reveal.
It’s understood the Australian Securities and Investment Commission (ASIC) formally banned flex commissions in the car finance market in 2017.
“Toyota Finance Australia Limited has not been served with a statement of claim, so we are unable to comment,” a spokesperson for Toyota Finance Australia told Drive.
“As always, if customers have any questions about their finance contract, we encourage them to contact the Toyota Finance Customer Service team on 137 200 from 8:30am to 5.30pm AEDT Monday to Friday (excluding public holidays).”
Court documents reportedly show the plaintiff is seeking to allow members of the class action to be able to nullify their car loans.
<button class="navigation_glide__arrow__je__h navigation_glide__arrow–left__y3DP1 navigation_glide__arrow–inactive__H6d8_" data-glide-dir="|Previous