Last week, a woman complained in a viral video about an oil leak in her new Mercedes-Benz. The issue seems has touched a nerve with frustrated car owners, and the online furor is shedding light on troubling practices in the auto sales industry.
On Monday, China’s banking and insurance watchdog urged the local government in Beijing to investigate whether Benz dealerships are violating the law by charging suspicious “financial service fees,” the official Xinhua News Agency reported.
The owner of the car in the viral video, surnamed Liu, alleged that fraud occurred during her car purchase. The dealership persuaded her to sign on to a low-interest loan provided by Benz’s financial arm, and then required her to pay a 15,200 yuan ($2,265) fee to an unknown personal WeChat account in order to process the loan, Liu said.
No invoice for the fee’s payment was provided, and the dealership did not mention the fee when persuading Liu to sign the loan, she said. Apart from fees, the car cost 660,000 yuan.
The fee, usually 3% to 5% of a total auto loan, is a common practice in China, where it supposedly covers the costs of assisting buyers with their loan application procedures, state-run CCTV reported in an industry investigation.
But there is no legal framework for these fees, which is why dealerships are unable to provide official invoices, CCTV said.
China’s banking and insurance watchdog said it plans to take action to protect consumers’ legal rights, Xinhua reported.