media release (17-410MR)

Volkswagen Financial Services Australia pays $216,000 penalty for misleading advertising

Published

Volkswagen Financial Services Australia Pty Ltd (ACN 097 071 460) (VWFSA) has paid a penalty of $216,000 after ASIC issued 20 infringement notices for alleged misleading statements made by VWFSA as part of its ‘1% you can’t ignore’ advertising campaign.

VWFSA ran several advertisements in various newspapers, on flyers and on websites that said particular models of Volkswagen vehicles were available for purchase on finance for a set weekly payment. Some advertisements contained a fine-print disclaimer while others did not display any further information.

ASIC was concerned that those advertisements carrying the disclaimer did not give sufficient prominence to important conditions applying to the stated finance offers and did not adequately explain how some of these conditions operated. These advertisements were misleading in that they did not:

  • Clearly or prominently disclose that the consumer was required to pay a significant balloon payment at the end of the finance contract to retain ownership of the vehicle and the finance contract was only for a period of 48 months;
  • Adequately explain the term ‘GFV balloon’, which related to the payment of the balloon payment; and
  • Adequately inform the consumer that a significant dealer administration fee may be imposed by the relevant Volkswagen dealer for arranging finance.

ASIC was concerned that some website advertisements did not display the important conditions related to the significant balloon payment and the finance contract period, and that a significant additional dealer administration fee may be imposed by the relevant Volkswagen dealer.

ASIC did not consider the ‘click through’ facility on some websites as adequate means of correcting the misleading overall impression.

Acting ASIC Chair Peter Kell said, 'Proper disclosure requires a genuine effort to ensure consumers will be aware of and able to understand any conditions. Consumers cannot reasonably be expected to navigate through dense text of fine print to find them.'

Background  

VWFSA holds Australian Credit Licence 389344.

ASIC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.

ASIC issued 20 infringement notices for representations that appeared in various national and local newspapers, on flyers, as well as on dealer or third-party websites, during the period 13 November 2016 to 31 January 2017. These infringement notices relate to some, though not all, of VWFSA’s advertisements in its ‘1% you can’t ignore’ advertising campaign.

The payment of an infringement notice is not an admission of a contravention of the ASIC Act consumer protection provisions.

Media enquiries: Contact ASIC Media Unit