The National Consumer Tribunal has ordered Volkswagen Financial Services South Africa to stop charging customers so-called on road fees on credit agreements.
In a statement on Monday, the Tribunal said this prohibition also extends to admin and handling fees.
The Tribunal has confirmed a Compliance Notice issued by the National Credit Regulator in 2017 declaring that these fees charged by Volkswagen Financial Services are not permitted by the National Credit Act.
As a consequence, VW Financial Service has been ordered to stop this practise and to calculate and refund all those consumers charges, fees or interest levied.
A report by independent auditors must also be submitted to the National Credit Regulator.
NCR Senior legal advisor, Nthupang Magolego, says BMW and Mercedes Benz South Africa are challenging the compliance notices in their Tribunal.
She says the National Credit Regulator will continue to conduct industry-wide investigations on fees and charges on credit agreements to root out illegal charges and fees on credit agreements.
The Tribunal ordered Volkswagen Financial Services to -
(a)cease the practice and/or conduct of charging consumers the "on the road", admin and handling fees on credit agreements from 10 April 2019 and to submit written confirmation to the NCR to this effect;
(b)calculate the total amount of charges, fees or interest levied on the "on the road", admin and handling fees; and
(c)refund all those consumers charges, fees or interest levied and submit a report by independent auditors to the NCR.
Volkswagen Financial Services South Africa said it was currently reviewing the ruling and obtaining legal advice.
