South Korean authorities have clamped down on dealers of foreign car brands to correct their overcharge and other after-sales unfair practices. The police have conducted extensive searches at imported car dealers to seize evidence that the dealers had overcharged parts repair costs, while the country’s Fair Trade Commission issued administrative order on unfair after-sales terms.

Daegu Gangbuk Police Station and Seoul Geumcheon Police Station announced on Monday that they raided a Ford Korea dealer and a BMW Korea dealer in mid-April on allegations that the two dealers overcharged local insurers and consumers on vehicle repair costs. Police confiscated related documents and digital data, including repair charge invoices from July 2012 to the latest date issued at the service centers of the two dealers.

According to police investigations, a BMW’s official dealer allegedly inflated repair costs by replacing parts that were not directly affected from a car accident in order to boost parts sales and clear out inventory. One dealer for Ford Korea until the end of 2015 is accused of exaggerating the degree of damage to stretch the repair bill.

The government has taken administrative action to correct unfair after-sales service terms of import car sellers. The FTC has reviewed maintenance service clauses of seven imported car dealers, including Mercedes-Benz Korea, Audi Volkswagen Korea, FCA Korea (Fiat and Chrysler Jeep), Jaguar Land Rover Korea, Korea Nissan, Hanbul Motors (Peugeot Citroen) and ordered fixes to five areas that work unfavorably for consumers.

Most of the provisions that the FTC has requested for correction are on repair term. Most foreign car owners have been complaining that they were talked into an expensive warranty package but could not end the terms after purchase. The FTC required the dealers to amend their clause so that consumers can terminate the contract terms at any time.

By Seok Min-soo and Park Chang-young

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]