Allegations of illegal financial fee profiteering by Mercedes-Benz dealership

Source:Global Times Published: 2019/4/16 23:19:09

The Mercedes-Benz dealership at the center of a consumer rights protection case in Xi'an, Northwest China's Shaanxi Province, reportedly profited from a questionable financial services fee, state broadcaster China Media Group reported on Tuesday night.

Lizhixing, the Mercedes-Benz 4S dealership, allegedly seized two thirds of a so-called financial services fee, CMG reported, citing an officer at the Shaanxi Provincial Tax Service under the State Taxation Administration.

A third-party automobile trading company was reportedly also involved in the case, taking one third of the fee.

This is the latest development in the oil leak scandal involving a Mercedes-Benz dealership in the city, which has captured widespread attention across the country. The case is now under investigation by a special task force established by local authorities in Xi'an.

Also, on Tuesday, the China Banking and Insurance Regulatory Commission (CBIRC) told Mercedes-Benz's auto financing unit in China to commence a nationwide investigation on possible wrongdoings concerning financial services.

In a statement on Tuesday, Mercedes-Benz said that it has suspended sales operations at the dealership pending the investigation. If the investigation finds the dealership was engaged in any illegal activity, Mercedes-Benz will cancel the sales authorization of that dealership it said.

The German auto brand is clouded in a scandal in which a female consumer alleged that a new Mercedes-Benz car she had just bought started leaking oil even before she drove it out of the dealership in Xi'an. A video clip of the consumer sitting on the hood of the car, crying and complaining about the leak has gone viral on Chinese social media.

Apart from the oil leak, the female consumer also alleged that she was forced to pay 15,000 yuan ($2,235.04) for financial services and other fees.

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