Toyota Australia Finance hit with big class action lawsuit

A class action lawsuit served by law firm Echo Law to Toyota Finance Australia claims the company used undisclosed “flex commission” arrangements by providing incentives for dealers to charge customers higher rates of interest than necessary. It is alleged customers were never told they could pay a lower interest rate on their loan.

Echo Law alleges this behaviour goes against prohibitions on unfair and dishonest conduct contained in Australia’s credit laws.

The class action is seeking compensation on behalf of all customers who took out a Toyota Finance dealership loan between January 1 2010 and 31 October 2018 that were affected by these practices.

Partner at Echo Law Andrew Paull says the total extra cost paid by Toyota customers is estimated to be hundreds of millions of dollars.

“This class action is about holding Toyota Finance to account for putting in place dealer loan arrangements that it knew were unfair and against the interest of Toyota customers,” says Paull.

“Most concerning, it appears that these practices resulted in vulnerable customers, such as those with low financial literacy, paying the most inflated interest rates. Some of these loans are continuing today.”

Flex commission arrangements were banned by the Australian Securities and Investments Commission after the Banking Royal Commission in 2017-2018 after it found arrangements between Westpac and car dealerships created “unfairness”.

A Toyota Finance spokesman said “Toyota Finance Australia Limited acknowledges that class action proceedings have today been served by Echo Law”.

“We will take the time to review the claim carefully before making any statement.”

Toyota customers with questions about their finance contract can contact Toyota Customer Service on 137 200 from 8:30am to 5.30pm, Monday to Friday.

Customers who want to participate in the class action can register their interest at

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