The agreement requires that BMW Financial Services refund each service member portions of their prepayment amounts based on the time remaining on their lease. BMW Financial must also pay damages to each service member, totaling to three times the refund amount or $500, whichever is larger, the statement said. BMW Financial also must also pay the U.S. Treasury $60,788.
The captive must also revise its policies and procedures to ensure that service members who terminate their leases before their term expires receive a full refund of eligible prepaid amounts.
BMW Financial Services, in Woodcliff Lake, N.J., provides leases to BMW, Mini and Rolls-Royce customers. When customers sign for a lease, they often make upfront payments, such as a cash payment, credit for a trade-in vehicle, rebates or other credit, the statement said. Part of the upfront amount can apply to the first month of the lease or licensing and registration fees. The remaining amount reduces the monthly payment for the duration of the lease.
After the Justice Department received complaints from two service members who said BMW Financial refused to issue them a refund on their lease, the department's civil rights division and the U.S. attorney's office for the district of New Jersey launched an investigation. The investigation found that BMW's captive failed to refund any portion of prepaid lease amounts to 492 service members who qualified.