A leaked Ernst and Young report has blasted BMW Finance for offering low-income customers loans to purchase expensive luxury vehicles.
According to The Age, the report says BMW Australia Finance gave $27,000 to a mother of 10 who had a zero hours work contract. The firm also offered close to $50,000 to a 76-year-old man using earning projections instead of his actual income.
Ernst and Young’s report says the actions weren’t isolated to a few cases but represented a wider "sales culture" in the Australian company that rewarded quick turnaround rather than sustainable business.
Earlier this year BMW Australia Finance was fined close to $391,000 (£231,000) for failing to properly examine the incomes of its customers and offering unsustainable loans. The latest fine followed an earlier one in 2015, which cost the firm $306,000 (£181,000).
Despite the fines, the report claims that BMW’s southern hemisphere company continued to reward salespeople that sold the highest-rate loans to customers. It said employees were paid between $375 (£222) and $8163 (£4830) per loan, depending on the interest rate agreed.
The Australian Securities and Investments Commission requested an investigation into BMW Australia Finance be carried out by Ernst and Young, and four reports are being produced. The first was leaked to Australian company Fairfax Media and has been the source of today’s information.
In an official statement, BMW Australia Finance said it was working "to ensure the company is updating its processes to meet all regulatory obligations".
Autocar understands that BMW’s other finance companies, including the UK-based BMW Finance, have no involvement with the Australian division and the issues found in the report only relate to BMW Australia Finance.