This week, the regulator announced it had slapped the German carmaker with a compliance notice for its conduct. It accused Volkswagen Financial Services of charging consumers “an on the road fee, admin fee and handling fee on credit agreements”.
“These fees are not permitted to be charged on credit agreements by the National Credit Act,” the regulator said.
The compliance notice instructs VW to refund consumers and submit an audit report to the NCR.
Company secretary Lesiba Mashapa said VW had been given “a time to conduct the audit to determine the number of consumers”. Affected consumers were expected to be repaid by December, he said.
Nomsa Motshegare, the NCR chief executive, said the act allowed consumers to be given a quotation “which sets out the cost of credit before signing credit agreements”.
“Consumers should request this from their credit providers so they can check the cost of credit being offered,” she said.
The NCR will continue to conduct industry-wide investigations on the cost of credit to root out illegal charges and fees that consumers are charged.
The NCR added that it was a criminal offence to charge consumers fees and charges that are prohibited by the National Credit Amendment Act of March 2014.
If VWSA fails to comply with the compliance notice, the NCR will apply to the National Consumer Tribunal to enforce compliance.
Early this month, BMW Financial Services was served with a similar notice by the NCR.
“Investigations into this practice in the vehicle finance sector are continuing. The practice appears to be widespread in this sector. Consumers are advised to lodge complaints with the NCR if they have been charged these fees by other credit providers,” Mashapa added.
VWSA spokesperson Matt Gennrich said the car manufacturer was aware of the compliance notice served on Volkswagen Financial Services.
“Volkswagen Financial Services is a separate legal entity from VWSA,” he said. “VWSA is, therefore, not in a position to respond to a compliance notice issued on a separate company over which it has no influence.”
He said Volkswagen Financial Services did not agree with the allegations of the compliance notice and would comment in due course.