Melanie applied for a car loan in August 2022. The lender approved a loan of up to $20,000 and suggested Melanie look for a car up to that price. Two days later, Melanie found the car she wanted to buy and gave the lender the contact details for the dealership where she intended to buy the car. The next day, the lender sent Melanie the loan documents.
Two days later, Melanie phoned the lender and spoke to a different staff member and said she wanted to remove the health and work waivers from the loan and hoped to pick the car up that day. The person Melanie spoke to needed to confirm whether Melanie’s requests were possible.
The next day, the lender said they could remove the mechanical breakdown insurance included in the sales agreement. Melanie signed the amended loan agreement that evening.
The following day, Melanie phoned the lender and explained she had rescheduled a hospital appointment for her mother as she was hoping to pick the car up that day. Melanie also told the lender that she had a work conference over the next few days which she would attempt to excuse herself from if the car was ready.
The lender explained that a device would need to be fitted to the car before it could be picked up and, had she known of Melanie’s plans, she would have started this process sooner. The lender explained that the job was outsourced to technicians and was out of their hands but would ask the dealership to try to have it done by the end of the day if possible.
When Melanie checked with the lender they said the technician should be at the dealership, but when Melanie spoke to the dealership they said the technician was not there. The lender discovered that the technician had been to the dealership but left because nobody at the dealership was aware of the job. The lender asked the technician to return that day, but the delay meant that Melanie was not able to pick up the car.
The next day Melanie advised lender that the dealership told her they could not release the car until they had received the payment from the lender. The lender confirmed that the device was fitted and told Melanie that they would pay the dealership, so Melanie left her work conference early to pick up the car.
After Melanie collected the car, she complained to the lender about the dealer referral fee and about the delay in the car being available for pick-up. The lender reversed the dealer referral fee, but did not resolve Melanie’s other concerns, so she complained to FSCL.
Dispute
Melanie thought the lender should not have charged a dealer referral fee because the dealership had not referred her to the lender. Melanie approached the lender directly for the loan and found the car herself. When the lender removed the dealer referral fee the loan term was reduced. Melanie believed that her fortnightly payments should have been reduced and the loan term kept the same. She also wanted the payment cycle to be changed from fortnightly to bi-monthly to match her pay cycle.
Regarding the service issues, Melanie said the application process went smoothly until it was time to collect the car. She said that the lender had told her on three successive days that the car would be ready to collect the following day. As a result, Melanie said she made other arrangements for her children to be picked up from school, rescheduled her mother’s hospital appointment, and left her work conference early. Melanie said the lender was responsible for the inconvenience caused.
The lender said that they had resolved the issue with the dealer referral fee, and it was reasonable for them to reduce the term rather than the weekly payments. Further, they said that they had not told Melanie the car would be ready but rather made a reasonable effort to ensure that the car was ready as soon as possible.
Review
We agreed that it was appropriate for the dealership to refund the dealer referral fee given the circumstances of this case. The fee is typically paid by the lender to the dealership for the work involved in preparing the loan application and guiding the applicant through the sign-up process. As Melanie highlighted, the dealership had not put her in touch with the lender, and therefore such a fee was inappropriate.
We thought it was reasonable for the lender to keep the fortnightly payments the same and reduce the loan term. The repayments were the same weekly rate as Melanie had agreed to when she took out the loan.
We declined to ask the lender to change the payment cycle when removing the dealer referral fee. Melanie had agreed to a fortnightly repayment schedule and therefore it was fair for the lender to decline to vary the repayment schedule.
We acknowledged that the process for collecting the car had caused Melanie frustration and inconvenience, but we did not find the lender to be at fault. Phone call recordings provided by the lender showed that Melanie was in frequent contact and eager to pick up the car as soon as possible, but the lender did not say she would be able to pick up the car any earlier.
There was clearly an issue with the technician, but this work was out of the hands of the lender. There was nothing to indicate that the lender had given the technician the incorrect instructions. We understand that it was inconvenient for Melanie to collect the car the next day, particularly considering she left her conference to do so. However, leaving the conference to get the car the immediate moment it was ready was Melanie’s choice. The lender did not lead Melanie to believe that the car would be ready before that day, nor did they pressure Melanie to leave her conference to get the car. We could not consider the lender responsible for the consequences of Melanie’s own decision.
Resolution
We decided that Melanie should discontinue her complaint, as the lender had reversed the dealership fee and had not led Melanie to falsely believe that the vehicle would be ready before it was. Melanie accepted our decision, and we closed our file.
Insights for consumers
We know you might want to pick your new car up as soon as it is ready, but we encourage you to listen to your lender and not make arrangements until you are certain the car is available.
