Sydney — Volkswagen (VW) took two raps in Australia on Friday as a federal court upheld a fine on the German carmaker as part of a global diesel emissions cheating scandal and a regulator started penalty proceedings against one of its financial units.
The court upheld a record A$125m ($86m) penalty imposed by the Australian Competition and Consumer Commission (ACCC) to settle lawsuits brought on behalf of thousands of Australian customers caught up in the emissions issue from 2015.
The settlement follows revelations that VW was using prohibited engine-control software to pass pollution tests. The company has already paid billions of dollars in legal costs around the world.
ACCC chair Rod Sims told reporters on Friday that the fine imposed on VW was just a taste of what companies could expect in the future.
The agency would use its new expanded powers to punish illegal activity with the largest fines possible and penalties of more than A$100m would not be unusual, he said.
VW did not immediately respond to a Reuters request for comment.
Separately, the country’s corporate watchdog, the Australian Securities and Investments Commission (ASIC), said it started civil penalty proceedings in a federal court against VW Financial Services Australia for allegedly not making appropriate checks before giving out 49,380 loans to consumers.
ASIC alleges that the unit, which operates nationally to provide borrowers with consumer loans to purchase new and used cars, did not make required inquiries into borrowers’ living expenses or if the loans were unsuitable for them.
These instances of alleged breaches in lending laws occurred between December 20 2013 and December 15 2016, ASIC said. The maximum penalty for one contravention equates to A$1.7m in the period till July 31 2015, and to A$1.8m for a contravention in the period after that, the watchdog said.
ASIC said proceedings will start on a date to be determined by the court.
A spokesperson for the unit said it takes its compliance obligations seriously and that it was co-operating with ASIC.
Reuters
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