Quote:
Originally Posted by SakhirM4
This is really absurd and shows the world we live in. BMW has to compensate people because they took out loans that they could not afford??  |
Australia has significantly stricter laws regarding corporate and director responsibility than the US does. We tend towards consumer protection rather than corporate protection.
I haven't read the ASIC report for this case, but I'd be willing to bet that BMW Australia were approving loans they knew the loanees would struggle to repay in a bid to increase sales, which obviously reflects positively on the company and impresses stakeholders. Then when the loanees default on their payments, BMW repossess the car and don't suffer any loss.
Meanwhile, the consumers are left without a car, are facing potential legal action and have their credit ruined which negatively impacts their lives in other ways.
It's easy to dismiss this as being a reflection of the absurd, entitled, nanny-state "world we live in" these days but there is sound reasoning behind it. Let's not forget, it was this exact activity that led to the collapse of Lehman Brothers and the 2008 GFC.
Are the people irresponsible and stupid for taking out loans they can't afford? Yes. Of course.
Are BMW also irresponsible dicks for approving those loans with the knowledge they are completely protected and won't suffer loss from a default? Absolutely.