Toyota Dealer Finance
(Flex Commissions) Class Action

Echo Law has commenced a class action on behalf of people who were sold a Toyota Finance car loan through a car dealer between 2010 and November 2018.

Our investigations have shown that Toyota Finance had an arrangement with car dealers which encouraged them to inflate the interest rates paid by their customers on car loans. This conflict of interest was never disclosed and resulted in many people paying very significant additional interest fees.

These loans from Toyota Finance were arranged not only by Toyota dealerships, but also by some other car dealers who had arrangements with Toyota Finance.

The class action seeks to recover the additional interest fees paid by Toyota Finance customers, and is based on allegations that Toyota Finance’s conduct was misleading, deceptive and unfair.

It does not cost any money to register and you will never be 'out of pocket' as a result of participating in this class action.

What is the case about?

Each year, tens of thousands of Australians purchase Toyota and Lexus vehicles through one of the car manufacturers’ many dealerships. Typically, the dealer will offer to arrange a car loan for the purchaser from Toyota Finance.

However, what most customers did not know is that, until around November 2018, Toyota Finance had an arrangement with its dealers under which:

  • There was a ‘base rate’ for interest fixed between the dealer and the finance company;

  • The dealer could adjust the rate offered to the customer to be above that ‘base’ interest rate; and

  • The dealer would be awarded a higher commission if they could get the customer to agree to a higher interest rate.

These arrangements were strongly criticised during the Financial Services Royal Commision, as customers are likely to assume that the dealer is acting on their behalf to secure a competitive interest rate, when in fact the dealer has been incentivised to offer the highest interest rate possible. Rather than the interest rate being based on any objective criteria, it was based on the dealer’s assessment of what they could convince that particular customer to agree to.

This conflict of interest results in many customers paying much higher interest rates than they would otherwise have agreed to, particularly vulnerable consumers such as those with limited financial literacy or language barriers.

We consider there are grounds for customers who were prejudiced by these unfair arrangements to seek to recover the additional interest they paid through a class action.

Who can register?

Registration is open to anyone who entered into a vehicle loan from Toyota Finance between 2010 and November 2018, where that loan was arranged by a car dealer. This may include dealers selling other car brands, where the dealer was arranging loans from Toyota Finance and loans sold under the names of PowerTorque or Lexus Financial Services, both of which are divisions of Toyota Finance.

So, if you took out a car loan more with Toyota Finance five or more years ago, you can register for the class action by clicking the ‘Register Now’ button below.

Why register?

Registration is free and has a number of benefits, including:

  • We will provide you with updates about the claim as it proceeds; and

  • We will ensure you are notified of any entitlement to claim compensation.

Costs

There are no out of pocket costs for registering and in no circumstances will group members ever be out of pocket by participating in the class action – whether the case is successful or unsuccessful.

This proceeding is supported by third-party litigation funding . This means you will not have to pay any money out of your own pocket for legal fees or related expenses and you will not be responsible for paying any costs if the class action is unsuccessful.

If the class action is successful and financial compensation is recovered from Toyota Finance, legal costs payable and a funding commission for the litigation funder will be deducted from the amount of compensation recovered for group members. These costs will never exceed the amount of compensation to which you may otherwise become entitled and will be assessed by the Court to ensure any legal costs deducted from the amount of any compensation are fair and reasonable.

Frequently Asked Questions

  • Lexus Finance Services and PowerTorque are divisions of Toyota Finance Australia. If you were sold a car loan by Lexus Finance Services or PowerTorque through a car dealer between 2010 and November 2018, you may be eligible to participate as a group member in this class action.

  • A class action is a process by which the claims of many people can be heard simultaneously in a single court proceeding.

    You can read more about class actions on our website here.

  • A class action is a proceeding that is brought by one or more persons on their own behalf and on behalf of a group of people (called group members) who have similar claims against another person or persons.

    If you were sold a Toyota Finance car loan (including under the Lexus Finance or PowerTorque brands) through a car dealer between 2010 and November 2018, you may be eligible to participate as a group member in this class action.

  • Registration is not compulsory at this stage, but there is no cost to register.

    If you do register, Echo Law will provide you with updates in relation to the class action and contact you using your registered email address if there is a successful outcome and you become eligible to receive compensation.

  • You can register for someone else if you have their permission to do so. You will then receive updates and information about this class action. If the class action reaches the stage where individual loss is assessed, we may then take steps to ensure you are a duly authorised agent or trustee of the group member you have registered for.

  • This claim has been issued on an open class basis. This means if you meet the group member definition, you are automatically included as a group member in this class action.

    However, we would encourage you to register now, to ensure that you receive updates in relation to the class action as it proceeds, including notification of any settlement or judgment that entitled you to compensation.

    You can register by clicking the ‘Register Now’ button at the top of this page.

  • When you register, you will be asked several questions about your car loan and contact information. You will also be asked to upload a copy of your car loan contract.

    You should answer these questions as accurately as possible. However, if you are unable to recall any particular details or are unsure, this information can be revised at a later time.

    We may contact you to verify your registration or follow up on any outstanding information over the course of the class action.

  • Group members can exclude themselves from the class action by taking steps to opt out of the class action. This is called the ‘opt out’ process and will occur at a later stage in the proceeding.

    Group members who have opted out of this claim will not be bound by its outcome, will not be eligible for compensation through this class action and will preserve their own individual claims.

    There is nothing you need to do at the moment if you do not wish to participate in this class action. If you are an eligible group member, you will be contacted at a later date in relation to opt out.

  • Group members in a class action are not individually responsible for the legal costs associated with bringing a class action and group members do not pay out of pocket costs by participating in a class action.

    If the class action is successful and financial compensation is recovered from IC Markets, legal costs payable and a funding commission for the litigation funder will be deducted from the amount of compensation recovered from group members. These costs will never exceed the amount of compensation to which you may otherwise become entitled, and will be assessed by the Court to ensure any legal costs and funding commission deducted from the amount of compensation are fair and reasonable.

  • The lawyers running the claim are from the law firm Echo Law.

    Echo Law is a class actions focused law firm founded by experienced legal professionals who have a proven track record of success in the industry.

    You can read more about us, and our track record on our website here.

  • This class action against Toyota Financial Services Australia is being funded by Litigation Lending Services. Litigation Lending Services was established over two decades ago in 1999 and is a leading pioneer in the litigation funding industry. You can read more about Litigation Lending Services here.

  • If you have a question that has not been answered, you can email us at enquiries@echolaw.com.au

Further Enquiries

You can review the Group Proceeding and Funding Information Summary Statement here.

If you wish to register your interest in this class action, you can do so by clicking the ‘Register Now’ button above.

If you have a question that is not addressed in the FAQs above, you can also contact Echo Law to discuss the class action by sending an email to enquiries@echolaw.com.au or calling Echo Law on (03) 7046 3565. Please note that while we will seek to respond to you as soon as possible, there may be some delay before you receive a response.