Volkswagen receives fine for emissions breach, civil suit against financial services arm in Australia – report

The hits just keep on coming for Volkswagen. In Australia, the German automaker now has to weather a fine and a civil lawsuit against the automaker’s financial services arm in the country, Reuters reported.

The automaker was fined AUD125 million (RM357 million) for breaching Australian consumer law by falsely representing its compliance to the country’s diesel emissions standards; this sum exceeded the AUD75 million (RM214 million) amount that was agreed upon with the Australian Competition and Consumer Commission (ACCC), Volkswagen said.

“Volkswagen AG firmly believes that the penalty of A$75 million agreed in principle with the Australian Competition and Consumer Commission to resolve the regulatory proceedings was a fair amount and is carefully reviewing the Court’s reasons for deviating from that amount,” a Volkswagen spokesperson said in a statement, and the automaker has not yet decided on appealing the court decision.

The fines imposed on Volkswagen by the ACCC are just a taste of what companies could expect in the future, ACCC chairman Rod Sims said, adding that the agency would use its new expanded powers to punish illegal activity with the ‘largest fines possible’, and penalties of more than AUD100 million (RM286 million) would not be unusual.

This is the latest in a long line of episodes involving Volkswagen’s diesel emissions compliance troubles, which began in September 2015 when the automaker admitted to using software to circumvent US emissions testing standards, and has since paid more than US$30 billion (RM124 billion) in fines, vehicle refits and provisions.

On the financial services side in the country, the Australian Securities and Investments Commission (ASIC) said that it has started civil proceedings in a federal court against Volkswagen Financial Services Australia for neglecting to carry out appropriate checks before giving 49,380 loans to consumers, the report said.

Volkswagen Financial Services Australia did not make the necessary inquiries into the living expenses of its borrowers, or if the loans were unsuitable for the applicants, ASIC said. These instances of breaches occurred between December 20, 2013 and December 15, 2016, the commission said; the maximum penalty for one contravention is AUD1.7 million (RM4.87 million) for the period until July 31, 2015, and AUD1.8 million (RM5.15 million) for one contravention in the subesquent period, said the commission.

Proceedings against Volkswagen Financial Services Australia will commence on a date to be determined by the court, ASIC said, and a spokesperson for the German marque’s financial services unit said that the company takes its compliance obligations seriously and that it is cooperating with ASIC.

The post Volkswagen receives fine for emissions breach, civil suit against financial services arm in Australia – report appeared first on Paul Tan's Automotive News.

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