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-   -   VW Finance misses collecting 1st EMI; levies late payment charges on me (https://www.team-bhp.com/forum/indian-car-loans-insurance/185904-vw-finance-misses-collecting-1st-emi-levies-late-payment-charges-me.html)

As many of you know, I've always had good things to say about the Vento. It's a fun car and drives like a dream especially on the highways.

So, when I got the car at Elite VW, I did the down payment and all the necessary documentation. I took a loan through VW Finance (because that was the condition for the 3 year RSA + insurance free).

Fast forward to 6 months after I got the car, I got a notice from VW Finance saying that I haven't paid one EMI. I contacted them about it and they started giving me a whole lot of complicated math around it. I requested for a meeting with their finance person.

After iterating through multiple emails, I met the Finance person at my office. He walked me through the details and also mentioned that the dealer didn't collect the first EMI along with the down payment. I asked him why that was not done and he said that it was a miss from the dealership and that I need to pay that up. I told him that I was not pleased with how this has turned out since I have always been a good customer who has promptly paid all my EMIs on time.

I agreed to pay the amount (~19k). I paid them promptly understanding that it was a clear miss from the dealer, I didn't want this to be part of any issues later on.

AFTER paying the missed EMI, I keep getting further notices from VW mentioning that I have a "late payment fee" pending to the amount of ~20k. I again reach out to them and ask them what this is about.

VW Finance replies that since I missed the first EMI, they have levied late payment charges from that point onwards till now. I am totally lost over this. For a miss by their dealership to collect the required amount as part of the down payment, and me ensuring that I pay the requested amount to keep the EMIs in line with payment terms, now I am being asked to pay late payment / finance charges for that amount.

What do I do? I keep following up with VW and they take down all the notes, ask me to send the evidence and then no one responds. The notices keep coming.

I am at a loss here. I am angry that, after having clearly told that, if I pay the extra EMI, all will be good but then they are now levying extra charges on me. I am sure this is getting recorded in my CIBIL ratings (haven't checked yet).

Any suggestions / guidance on this matter is deeply appreciated.

Complain to the RBI - http://www.rupeeclues.com/2016/02/om...financial.html

Or alternatively approach a lawyer and send them a legal notice that you will take them to consumer court.

Send a copy to VW Finance's corporate office

Volkswagen Finance Pvt Ltd
3rd Floor, A- Wing, Silver Utopia,
Cardinal Gracious Road,
Chakala, Andheri East,
Mumbai - 400099

Have you tried to escalate this to the higher ups at VW? They might be of little help but there is no harm in trying. I was wrong to think that VW were incompetent only when it comes to servicing their products. Today's the day I discovered they aren't experts in financing either. :Frustrati

- Why should you pay for the dealer's mistakes? Escalate the issue if you haven't done that yet

- As a precaution, take everything in written only. All claims should be laid down in black and white by VW on paper

- Record calls if necessary

Going to consumer court could be the next step, but it is time and energy consuming and there is virtually no guarantee of success all thanks to the shoddy consumer laws in our country. If the dealer doesn't budge, tell them you will be forced to take this route.

Most places will immediately fold on getting a legal notice especially for a petty sum like Rs.20,000 because the costs of fighting the case even in consumer court will be much more than the costs of settling the litigation.

Going through the RBI ombudsman process will cause them even more grief, in this case.

If you go to consumer court, do make the dealer a party in the case as it was their responsibility to file the first EMI, especially if they have (as is quite likely) collected money from you for that purpose.

As a lawyer I can assure you that with the pro-consumer approach that the consumer courts have, there is no reason you would not succeed. I agree that the dealer should also make a party. You need not engage a lawyer, if you don't want to and can attend to the matter personally which is permitted in consumer courts. You may or may not issue a legal notice before filing the consumer complaint as it appears that you have already exchanged several communications already. Do make the dealer a party in addition to Financing company.

Though 25,000/- appears to be a small amount but in principle and to set a precedent you should pursue it. To share my experience, I had approached the consumer forum for a sum of ₹672/- which was wrongly levied as late payment charges by AXIS Bank for delay in payment of credit card outstanding by 4 days when the cheque was deposited by me well within the due date leaving more than the stipulated days for clearance. The cheque was cleared by the Bank belatedly at their end and charges were being insisted. I exchanged about 20 emails before filing the consumer complaint. I got compensation of ₹20,000/- for harassment and ₹5000/- for litigation cost, albeit after 2 years, but it was worth the wait.

I got my money refunded by Expedia india / Finnair some years back after a legal notice once they had taken nearly six months to claim they didn't owe me a penny

https://www.flyertalk.com/forum/indi...-question.html

Citibank India used to send my wife repeated notices for payment of Rs. 3,500 on a credit card (which she never got in the first place!). After calling up a couple of times, we simply tore up the notices and they eventually stopped coming after some time. There is no report in her CIBIL document either.

I'm no lawyer, but this is just harassment and not deficiency of service right? They are just demanding payment - Rs. 20K has not been debited automatically from his bank account.

1) Continue paying your regular EMIs.
2) Keep a copy of your email interactions & other documentary evidence.
3) Ignore the notices, since you have already done your job
3) Keep an eye on your CIBIL score. Even if they report it to CIBIL, there will only be a small blip in the score - because you have been regular with EMI payments.
4) You can even dispute a negative entry on CIBIL https://www.cibil.com/resolve-report-inaccuracies. Anyway, I don't think VW Finance will bother about reporting such 'petty issues' (for them) to CIBIL.

Most of the time, it is the financial institutions' internal processes that are automatically triggering these notices. I don't think VW Finance is bothered about getting that 20k from you (going by their disinterest in responding to your emails).

Only problem with the above suggestion: I wonder if they will 'close' the loan, till the late payment issue is resolved. But if they fail to close then loan, then there is a huge deficiency of service (and consumer courts come into the picture).

Thank you for the query. It is harassment as a consequence of deficiency in service. There is a relationship that exists between the banker/ financial institution and the customer on the on hand and the dealer and the customer on the other. In view of their failure to debit the first EMI on a timely basis even after having obtained my consent for the same at the time of sanction of loan, there has been a failure on their part which tantamount to deficiency in services. The repeated demands and levy of charges has subjected the customer to harassment and therefore, entitles the customer to file a consumer complaint under Section 12 of the Consumer Protection Act, 1986 for compensation and costs. Hope this helps.

As Mr.Panda correctly says. Further, if they are charging a late fee it has surely been added to his loan amount with VW Finance Company, and interest will be further charged on that amount as the dispute progresses.

What is happening to you is not intentional harassment. It is a system doing exactly what it was programmed to do - what triggered this action is the mistake by the dealer.

You have two options:

1. Talk to the VW folks and explain to them the problem from the beginning, bring it to a closure and try to get something from them for the inconvenience you had to put up with for no fault of yours. The chap who is going to work on this issue may not be the one who sorted out your initial problem with the missing EMI - the machine did not understand the human intervention and went about its job of calculating interest from day 1, now it requires a human over-ride with suitable authority to waive off that interest. It should have been done on day 1 when you paid the pending EMI, but someone has not closed the loop.

2. Take it to public forums, consumer court, et al and spend quite a lot more time, effort and angst than you may have had to in (1) above. Hope that it gets resolved, and in the meanwhile burn bridges all round.

As long as we keep our minds open to the fact that systems are inflexible, do not have emotions and do exactly what they are told to do, and come to terms with the fact that nobody in VW has a personal grudge against us, it would be possible to get most such things sorted out. Yes it would take some amount of time and effort - that is fairly inevitable at this point.

My post may seem like I do not empathize with your current situation, but that is not the case. Sometimes looking at the situation objectively, understanding the underlying causes and looking for a logical resolution may seem dispassionate, but it can facilitate efficient resolution.

As far as I can see he has already done that before trying other methods. At this stage, reporting them to the RBI (as there is no ombudsman as such, for NBFCs) and/or consumer court is the best possible way forward.

Preferably both approaches in parallel.

I respectfully disagree with you on this particularly in view of having spent substantial time and energy in clarifying the actual facts to the concerned. I believe the delay or failure to ensure timely human intervention to override the machine whether it is intentional or otherwise in itself speaks volumes about their concern for their customer. This needs to be set right. I would go to the extent of sending out a legal notice to the companies as also copied to senior officials placing on record the entire background and also stop payment of further EMIs till the time the entire wrongful imposition of charges. Give them 15 days for needful and confirmation and on failure file a consumer complaint.

While I do agree that litigation should be the last recourse and amicable talks are the best option to resolve disputes but at times it is advisable to resort to the former to set the principle right so that they will think twice before harassing another customer in the similar way. If everyone takes a back seat and shows reluctance in taking initiative to stand up against such illegality be rest assured there will be many more such instance. It will only reaffirm their belief in getting away with whatever they do and in the process may also gain some extra money from those who choose to pay it off knowingly or unknowingly.

Did you get a written acceptance from the dealer or the financing company that the dealer was at fault for not collecting the EMI? This would be important in case the transaction is reported CIBIL as a payment default, then it would show up on your credit record. While India has not moved to a credit rating based interest rate yet, it could affect your future loan approvals.

Hi All,

Many thanks for your supportive words and advice. To respond to some of the questions / notes above

1. I am continuing to pay EMI - VW is continuing to collect them on a regular basis

2. I've tried escalating this within VW. The last person called directly from VW and she was clear that she will take action. None has been taken so far. I've sent her a reminder a few days ago. Do any of you have email addresses of top executives / leaders in VW? If so, please PM me the same.

3. I checked my CIBIL report and yes! they have put this up as a late payment for over a year. They keep marking it. Please see attached. This infuriates me beyond anything. What kind of folks are these?



4. I will report this to RBI and see what comes out of it.

5. I plan to settle this loan at the earliest this year and so I am concerned that they will make this 20k a condition for loan closure. I'd definitely not want them to get away with this.

VW is not a reputable organisation. Neither in India or across the world. It does not behave in the interest of the consumer. It does make some products that stand out, as well as many that are clearly mediocre and poorly engineered.

You are approaching the wrong people in VW. These customer care and other casual executives that call you up to harass you do not have the discipline or the moral compass to sort out a problem on your behalf by dealing with the various principles involved, instead they are showing you their finger because they feel you are the least risk target. What if they approach their principles with this case and get fired in the process. So they take the least risk approach.

This should not be a difficult job ideally. But the fact that VW is making this as difficult as possible for you shows what values run inside their organistation.

Also do note that VW ever since it s inception into India, when it was searching for a factory site, and had teamed up with then AP CM, YS Reddy with venture Vashishtha Wahan (VW) has always been mired in corruption. Not a company with high ethical values.