ASIC has announced that Volkswagen Financial Services Australia Pty Ltd (VWFSA) has paid a penalty of $216,000 after ASIC issued 20 infringement notices for alleged misleading advertising by VWFSA as part of its ‘1% you can’t ignore’ advertising campaign.
ASIC says that VWFSA ran several advertisements in various newspapers, on flyers and on websites that said particular models of Volkswagen vehicles were available for purchase on finance for a set weekly payment. Some advertisements contained a fine-print disclaimer while others did not display any further information.
ASIC was concerned that these advertisements were misleading in that they did not:
- Clearly or prominently disclose that the consumer was required to pay a significant balloon payment at the end of the finance contract to retain ownership of the vehicle and the finance contract was only for a period of 48 months;
- Adequately explain the term ‘GFV balloon’, which related to the payment of the balloon payment; and
- Adequately inform the consumer that a significant dealer administration fee may be imposed by the relevant Volkswagen dealer for arranging finance.
ASIC was also concerned that some website advertisements did not display the important conditions related to the significant balloon payment and the finance contract period, and that a significant additional dealer administration fee may be imposed by the relevant Volkswagen dealer.
ASIC did not consider the ‘click through’ facility on some websites as an adequate means of correcting the misleading overall impression.