The National Consumer Tribunal has ruled that on-the-road (OTR) fees, admin and/or handling fees are illegal. IOLMotoring
Volkswagen Financial Services South Africa has been dealt a blow at the National Consumer Tribunal, with a panel ruling that its on-the-road fees, admin and/or handling fees are illegal. The tribunal confirmed that the compliance notice issued by the National Credit Regulator to VW Financial Services South Africa for charging consumers the OTR, admin and handling fees on credit agreements was valid, declaring the fees to be unlawful and that it needed to refund customers.
The regulator said it would “continue to conduct industry-wide investigations on fees and charges on credit agreements to root out illegal charges and fees on credit agreements”.The ruling has massive implications for the entire industry, but before motorists get excited about an unexpected pay day worth a few thousand rand, it is likely to be appealed by VW.
These fees have been illegal since 2007, with the introduction of the NCA, yet vehicle financing entities have continued to add them to the credit agreements - masking 'gifts' of flowers, champagne and even personalised key rings, as well as valet, pre-delivery checks and staff costs as “delivery fees” and “service fees” - even though the vehicles were often driven off the showroom floor by the customer.
In 2017, the National Consumer Commission issued a compliance notice against VW and BMW Financial Services. BMW then made a consolidation application to the tribunal to consolidate matters between the two finance arms, wanting the notices rescinded.
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