Consumer complaint received 2024-07-31 00:00:00
Product: Vehicle loan or lease — Lease
Issue: Problems at the end of the loan or lease — Problem while selling or giving up the vehicle
Company: BMW Financial Services NA, LLC
State: NE

Complaint narrative:
XX/XX/year> From : XXXX XXXX XXXX XXXX XXXX XXXX XXXX, XXXX XXXX Re : BMW Lease XXXX To : BMW Financial Services CC : Consumer Financial Protection Bureau ( CFPB ) On XX/XX/year>, I called BMW FS to obtain a payoff quote for my lease of a XXXX BMW XXXX XXXX while I was in a XXXX Dealership looking to trade in this BMW to purchase a new car. I was transferred to a representative, who informed me the payoff amount was {$100000.00}. No restriction or limitation on paying off the vehicle were mentioned during this call besides the dollar amount. Utilizing this quoted dollar amount, I traded this vehicle into a XXXX Dealership as part of the purchase of a new vehicle. The XXXX Dealership offered me {$100000.00} for the vehicle, and I provide the XXXX Dealership a check for {$9900.00} to makeup for the negative equity. The XXXX Dealership then cut a check for {$100000.00} to BMWFS for the payoff. 
Subsequently, XX/XX/year>, I received a letter from BMW Financial Services ( BMWFS ) dated XX/XX/year> stating, in summary, that BMWFS had received a payoff from a third-party dealership, that they would return the payoff received by mail to the original sender, and that they would only accept a payoff from myself or a BMW Center . I called BMWFS Customer Service on XX/XX/year> to inquire as Section 30 Purchase Option of the lease agreement made no reference of such a restriction. After many minutes on hold, the representative pointed to Section 36 Assignment of the agreement as the controlling section for this restriction. When asked about options, the representative stated I could personally buy the vehicle not involving the dealer. I pointed out that the dealer was essentially acting as my agent in this transaction but that didnt matter. I then ask whether I had to pay in cash from a checking account or whether I could obtain a loan for the purchase as I dont have the full amount of funds available to do so on my own. The representative stated I could obtain a loan for the purchase, and stated that BMWFS worked with XXXX. The representative could transfer me to them to work on obtaining a loan. After obtaining a loan and purchasing the vehicle through XXXX, I would be free to do whatever I wanted with the vehicle, including transferring it to the dealership to whom the vehicle was traded in. 
On XX/XX/year> I called BWMFS and spoke with XXXX to inquire about the return of the check as XXXX ) neither the dealership nor I had received the check back and XXXX ) I learned from the dealership that the check had actually cleared and had been paid out of their bank account. BMWFS advised me that they deposited the check into their account on XXXX/XXXX/204, that they would hold the funds for 15 business days, and issue a refund check via mail no earlier than XX/XX/year>. I had asked why they deposited the check if they werent going to accept it, and she stated that it was how their lockbox process worked. I stated I and the dealership needed the funds urgently to make other arrangements to payoff the vehicle but she stated there was no way to expedite it. I suggested that since they deposited the check and didnt advise me on the phone about no third party payoffs when I called for XXXX that they could change course and accept the funds. XXXX said they would not as it was laid out in the lease agreement that they would not accept third party funds. I asked XXXX where it was in the lease agreement, and referred her to Section 30 Purchase Option which made no such reference She said Its vague, but its in there. I asked her to point to where it said that, and she again could not point out that language of not accepting third party payoffs. Instead, she referred to Section 36 Assignment and said that that is what that section meant. I asked to speak with someone who had the authority to make a decision on whether to accept the funds and XXXX said there was no one else she could transfer me to that had decision authority. I further asked if I or the dealership who sent in the funds would receive interest on the {$100000.00} while they held it for three weeks and she said no. 
Unfair, Deceptive or Abusive Acts or Practices ( UDAAP ) It is my belief that the sequence and details of the events laid out above constitute Unfair Acts or Practices. Consumers, including myself, do not walk around with copies of lease agreements in their hands. When I called BMWFS Customer Service while at a dealership and asked for a payoff quote, not having access to important information ( i.e. that third party dealership payoffs were not accepted ) hindered my decision making ability and harmed me. Not being provided this information when obtaining a payoff via phone deprived me of important information to avoid injury. While BMWFS may say they subsequently emailed additional payoff details and restrictions to my email ( and they did ), this came too late. 
It is also my belief that BMWFSs act of accepting a check for {$100000.00}, depositing it in their account, then immediately advising the borrower that they wont accept the funds, and holding any refund for 15 business days ( 21 calendar days ) is abusive. BMWs process of accepting a check via automated lockbox and then layering on an after-the-fact review of said items where they choose to not accept the funds causes me harm. I am unable to remedy this situation because BMWFS is holding the funds for XXXX weeks before issuing a refund. BMWFS benefits from having these funds on their balance sheet for XXXX weeks, while I and the dealership from whom the funds are derived are further harmed by XXXX ) not being able to remedy the situation independently from BMW and XXXX ) not earning interest on the funds. BMWFS could choose to operate a payoff process that reviews items first for what they deem to be acceptable funds, and then return an unprocessed check to an issuer/consumer it they dont accept it. Instead, they choose to operate in a reverse order of accept funds, question the funds latera process that harms consumers. 
It is also my belief that BMFS is profiting from these abusive acts through their partnership with. XXXX for instance charges loan origination fees of {$390.00} for car loans originated through them. The fact that BMWFS refers consumers to XXXX when BMW consciously refuses to accept payoff funds from a third party dealership seems to benefit BMWFS and their partner while harming consumers. While BMWFS states they will not accept payoff funds from a third-party dealership, they will however accept payoff funds from a third party loan provider such as a XXXX It seems from whom BWMFS decides to accept third party funds for payoffs from is capricious and arbitrary. 
Finally, the lease agreement either is, or borders on deceptive. As admitted by BMWFS Representative XXXX during a phone call on XX/XX/year>, the payoff section of the lease agreement makes no reference to a prohibition on a payoff by a third party. BMWFS Representative stated the lease agreement on this topic was Vague, but its in there. Such a material point should be explicitly mentioned in the appropriate section on payoffs in the agreement ; instead, it appears to be materially omitted. BMWFS then must rely on daisy-chaining numerous sections together using legalese language to come to the finding they did on the meaning of the payoff section of the agreement. 
Ask My ask is that BMWFS, considering the above, accept the payoff funds already in their positions to payoff the lease agreement.

Company response to consumer: Closed with explanation