An investigation has been launched after reports that Mercedes-Benz Automobile Finance Co illegally charged a customer a financial service fee, as claims surfaced in Shanghai of dealers also charging fees.

The China Banking and Insurance Regulatory Administration has asked its Beijing authority to initiate an inquiry.

A woman who bought a Mercedes-Benz she claims was defective from a dealer in Xi’an, Shaanxi Province, has now claimed she was cheated over a “financial service fee.”

The woman said she bought the Mercedes-Benz CLS300 from Xi’an Lizhixing Co for 660,000 yuan (US$98,445) but found the engine was leaking oil after she picked it up on March 27. She asked for a refund or a replacement but the dealer only agreed to change the engine.

The incident attracted wide attention after a video of the woman sitting on the bonnet of a Mercedes-Benz while weeping and arguing with salesmen at the 4S dealer store on April 9 was posted online.

The Xi’an market watchdog launched an investigation and asked the dealer to refund the buyer. The regulator also arranged a face-to-face negotiation between the two sides on Saturday, during which the buyer said she had intended to purchase the car outright.

However, the dealer persuaded her to use Mercedes-Benz finance as it is said to feature low interest.

The dealer also “forced” her to pay a “financial service fee” of 15,200 yuan to a personal account without providing a receipt, she claimed. The woman said she thought this was fraud as the dealer hadn’t provided any services.

Mercedes-Benz issued a statement on Sunday, saying it never asks for any financial service fee from dealers or customers.

A Shanghai consumer surnamed Wang who visited several Mercedes-Benz 4S shops to purchase an off-road vehicle said he was asked to take out a loan at the Songzhixing shop on Changshou Road.

The salesperson said the car was popular, and many 4S shops would not sell it if buyers refused to take a loan, Wang said. A salesperson would not get a commission without arranging a loan.

The same requirement was raised by the Minxing Automobile Service Co 4S shop, Wang said.

The Shanghai Consumer Council said yesterday they had received complaints about other automobile companies charging financial service fees.

Lawyers said car sales companies often use various excuses to charge fees to raise their profits, which infringes consumers’ rights to make choices.

A Shanghai consumer surnamed Huang who wanted to purchase a car at a 4S shop last year was told that he must buy a 13,800-yuan package including sticker and tachograph, and a three-year car insurance if he wanted to enjoy a discounted price of the car.

Huang asked several 4S shops the next day, and some had the same requirement.

Meanwhile, a woman Wang Wen who paid 340,000 yuan for a new Mercedes-Benz at the Zhongshengzhixing 4S shop on Jinyun Road in Jiading District found it was faulty.

She asked for a refund, but the 4S shop refused, and offered free exchange, free components and reduction of insurance fees as replacement.

Wang learnt that the car was an “auction car” sold to dealers at a discounted price, and had probably been used for display or trial runs.