Toyota dealers ordered to refund customers over unjust premium charges
Over 370 customers were just granted a $635,860 refund after being overcharged premiums on their consumer credit insurance (CCI) when purchasing a vehicle from several different Australian Toyota dealerships. The refunds were made mutually by Australia Insurance Limited (Allianz), Aioi Nissay Dowa Insurance Co., Ltd (Aioi) and MTA Insurance Limited (MTA) and Toyota Finance Australia Limited (Toyota Finance). The consumers were illegally overcharged between January 1, 2006 and September 26, 2011. The Toyota dealerships involved were Maitland Toyota, Northpoint Toyota, Pacific Toyota, Grafton Toyota and Motorama Toyota.
The swindling occurred because customers were charged the premium allowed for commercial credit insurance cover, rather than the lower premium allowed for consumer policies. The premium was financed in each case, in addition to the purchase price of the car.
The reasoning behind the overcharging was that employees at the Toyota dealerships profited from selling consumers a commercial policy as opposed to a consumer policy, because they received a hefty commission. In fact, Toyota personnel involved received up to a 50 percent commission of the policy premium. Car dealers are not allowed to receive over 20 percent in commission on CCI policies, according to the National Credit Code.