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Johannesburg – BMW Financial Services plans to lodge an objection to a compliance notice issued by the National Credit Regulator (NCR) regarding on-the-road fees charged on credit agreements.
The NCR on Wednesday issued a compliance notice to the financial services arm of the group, stating that the fee is not permitted to be charged on credit agreements according to the National Credit Act.
The fee can go up to R4 500, NCR Company Secretary Lesiba Mashapa told Fin24 on Friday. The NCR is unclear on what the fee covers, but it does include the fees that can be charged on a credit agreement, he explained. It is charged separately from the license and registration fee, he added.
The regulator wants BMW to refund customers and submit an audit report to the NCR.
“The National Credit Act allows consumers to be given a quotation which sets out the cost of credit before signing credit agreements," Nomsa Motshegare, CEO of the NCR said in a statement. “Consumers should request the quotation from their credit providers so that they can properly check the cost of credit that is being offered.”
Mashapa said that this is of particular concern because consumers do not understand the cost of credit they should be paying for.
BMW Financial Services said it “disagrees with and disputes” the contents of the notice.
“The ‘on the road fee’ is a fee agreed to between the dealer and the consumer,” the statement read.
Regarding this Mashapa said that BMW has the right to object to the notice to the National Consumer Tribunal, which will then make a ruling.
The NCR is conducting industry-wide investigations in the vehicle finance industry relating to all fees and charges included in credit agreements, he confirmed.
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