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Mercedes-Benz Dealership Worked With Third Party to Push Suspicious Loans: CCTV

By Zhao Runhua / Apr 17, 2019 03:35 PM / Business & Tech

Photo: IC

Photo: IC

A local Mercedes-Benz dealership in western China was colluding with a third-party company to charge customers suspicious fees, state-run broadcaster CCTV said Tuesday.

A woman in Xi’an complained in a viral video last week that she had recently been forced to pay her car dealer a surprise 15,000 yuan ($2,240) “financial service fee” after signing up for a separate low-interest loan when she bought a 660,000 yuan car.

CCTV found after an investigation that the fee was charged by a third-party company called Shaanxi Yuansheng. Yuansheng had assigned staff to Xi’an Lizhixing Automobile Co., the dealership at the center of the viral video, in order to persuade car buyers to join the loan program.

Lizhixing received two thirds of the profits from such deals, while reporting the transactions as “information and tech services fees" — a broad and commonly used accounting item in China — to avoid the attention of tax inspectors. Yuansheng claimed Lizhixing was its only partner.

Mercedes-Benz said it has suspended Lizhixing’s operations, and is conducting an investigation into the dealership’s practices. It’s unclear if other Benz dealerships have engaged in similar arrangements, or what Yuansheng’s main business is.

On Wednesday morning, the official Xinhua News Agency published a commentary calling for in-depth investigation into “behind-the-scenes” deals in China's car sales industry.

Related: Mercedes Customer Complaint Fuels Long-Simmering Dispute

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