By Park Jin-hai
Nine Korean and German auto financing firms were caught using unfair lease practices, the Fair Trade Commission (FTC) said Tuesday.
BMW Financial Service Korea, Mercedes-Benz Financial Korea and seven Korean auto financing firms unfairly made customers pay purchase and registration taxes when they leased cars, the FTC said.
The other auto financing firms implicated are Hyundai Capital, Samsung Card, Shinhan Capital, Shinhan Card, Hana Capital, BNK Capital and Lotte Capital.
They made customers pay about 7 percent of each leased car’s price in purchase and registration taxes.
Under tax law, the auto financing firms handling auto leases should cover the purchase tax, although the lease cars are registered under the customers’ names.
“Currently, the number of people leasing cars has been on the rise, but due to a lack of information customers’ complaints are surging,” an FTC official said.
The number of lease-related complaints filed with the Financial Supervisory Service nearly doubled to 525 cases in 2012, from 304 in 2010. As of September 2013, the number stood at 607 cases.
They also unfairly used the time of issuing receipts for lease payment or buying insurance as the starting date of the lease, although customers didn’t receive the car on those dates. Customers were required to bear related costs, although the delivery of cars had been delayed.
These auto financing companies were required to submit revised lease policies to the Financial Supervisory Service (FSS) by the end of the month.
“The correction order will be an opportunity to protect the rights of auto lease customers and erase the causes of contention between lease companies and customers,” said the official.
Mercedes-Benz Financial said the company has recognized the need for revision in its lease policy and filed its revised version with the FSS, but has not seen any progress. “In May, we filed it again with the FSS and waited for their response,” said the company official.
BMW Korea said it will correct its lease policies as instructed.