by Alan Thornhill
Hundreds of private motorists, who bought cars from Toyota dealers, were overcharged, on their vehicle insurance.
The dealers involved then received more than they were entitled to, in commissions, on that insurance.
But an official watchdog stepped in, and almost $636,000 has been returned to the 370 motorists, who were caught out in this way.
The Australian Securities and Investments Commisssion reports that several Toyota dealers were found to be ordering Commercial Credit Insurance (CCI) cover, for private motorists.
In each case, the cost of that cover was financed, along with the purchase price of the car, by Toyota Finance, ASIC said.
It said, too, that personnel at the Toyota dealerships benefited from this practice.
They had received commissions of up to 50 per cent of the premiums.
“Under the National Credit Code, which regulates consumer credit and associated insurance, car dealers are not allowed to receive, and insurers are not allowed to pay, more than 20 per cent commission on CCI policies,” ASIC Commissioner, Peter Kell, said.
The dealerships involved had received up to 2.5 times the commission they were entitled to, he added.
ASIC named the Toyota dealers involved as Maitland Toyota, Northpoint Toyota, Pacific Toyota, Grafton Toyota and Motorama Toyota.
One of the insurers involved Aioi, discovered what was happening and reported it to ASIC.
Commissioner Kell said ASIC acknowledged the co-operation of Toyota Finance and the insurance companies involved, in compensating the motorists involved.
The refunds involved came to $635,860.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
Saturday May 25
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