BMW Australia ordered pay back tens of millions of dollars to "misled" customers

The Australian arm of Luxury German car maker BMW has been ordered to pay back more than 55 million U.S dollars to Aussie car buyers after it was deemed they misled customers into thinking they could afford their range of cars.

In what has been described as Australia's largest ever consumer payback, BMW Australia Finance has signed an agreement to return the tens of millions of dollars after it was revealed earlier this year that the company was giving out loans to those with zero- and sometimes negative-disposable income.

A review of the business practice by the Australian Securities and Investments Commission (ASIC) found that BMW offered generous bonuses to salespersons who could sell the most cars. Fairfax Media reported that in once instance, a 21,000 U.S dollar loan was given to a single mother on casual employment.

According to the review, BMW accepted blatantly false loan documents in order to justify the decision to loan the money to those who couldn't afford them.

Fairfax Media reported to 15,000 Australians were affected by the scandal, and as a result BMW will write off 37 million U.S dollars' worth of loans, will pay back 11 million U.S dollars to misled customers and will slash interest rates to the tune of 5.6 million U.S dollars.

The news comes just a day after another German car maker, Volkswagen, announced that more than 60,000 cars in Australia have been formally recalled in order to deal with the diesel emissions scandal.

The Australian government recently gave clearance to the car maker to recall the affected models, which include the popular Golf, Passat and Tiguan, following the scandal which erupted earlier in the year.

According to Volkswagen Australia, the software upgrade is "immediately" available to affected Australian customers. Endit