After coming unstuck globally with its emissions testing scandal, Volkswagen has again hit the headlines – this time for misleading statements from its Australian financial services division.
Volkswagen Financial Services Australia (VWFSA) has been forced to cough up $216,000 in penalties to the Australian Securities and Investments Commission (ASIC) for making a series of misleading statements in an advertising campaign between 13 November 2016 and 31 January 2017.
According to ASIC, the “1 per cent you can’t ignore” advertising campaign appeared in flyers, newspapers and on websites, which claimed Volkswagen vehicles could be purchased on finance plans that used set weekly payments.
ASIC’s concerns came down to the terms and conditions disclaimer, which the regulator alleged was not sufficiently prominent on some advertisements, and was absent altogether on others.
Of particular note were concerns around the disclosure of balloon payments and an explanation of what they entailed, length of the contract, and disclosure of dealer administration fees.
“Proper disclosure requires a genuine effort to ensure consumers will be aware of and able to understand any conditions,” said acting ASIC chair Peter Kell.
“Consumers cannot reasonably be expected to navigate through dense text of fine print to find them.”
This latest penalty pales in comparison to those handed out around the world following the emissions scandal, with Volkswagen reportedly attracting a US$2.8 billion fine in the US alone.
However, the six-figure penalty still serves a warning to businesses of all size to be considered in marketing and promotional materials, lest regulators clamp down on perceived misleading claims.
Insurance giant AAMI was also slapped with penalties recently relating to alleged misleading claims around one of its insurance products.