Toyota Finance and three insurers have refunded $635,860 to customers who were overcharged on their consumer credit insurance.

Toyota Finance, Allianz, Aioi Nissay Dowa Insurance and MTA Insurance refunded the 370 consumers who had been charged the premium for commercial credit insurance instead of the less costly premium on consumer policies.

They were overcharged on car purchases from several Toyota dealers between 2006 and last September, and the matter was referred to the Australian Securities and Investments Commission (ASIC) when one of the insurers discovered what had happened.

ASIC says dealership personnel benefitted from selling a commercial rather than a consumer policy because their commission was up to 50% of the premium.

Under the National Credit Code, car dealers are not allowed to receive, and insurers are not allowed to pay, more than 20% in commission on consumer credit insurance policies.

ASIC Commissioner Peter Kell says that when consumers are overcharged, they are entitled to recover the entire commission.

Aioi Nissay Dowa discovered the overcharging and reported it to ASIC, which said Toyota then found other cases of overcharging.

Toyota Finance has refunded any interest associated with financing the higher premiums.