Echo Law will argue that between 2010 and 2018, there was an undisclosed "flex commission" arrangement between Toyota Finance Australia and its dealerships, which led to customers paying significantly higher interest charges than they would have otherwise agreed to.

Cliftleigh resident Sheridan May said she was taken advantage of when she sought a loan through Toyota to purchase a car in 2015.

Ms May trusted the company would look after her, however the interest rate was set at 11 per cent per annum - much higher than other Toyota finance loans and the going market rate for secured car loans.

"I had no clue that the dealer would get paid extra if they increased the costs on my loan," Ms May said. "I had believed everyone was treated fairly. It was only later that I realised my loan was unusually expensive.

"I'm a single mum too and I am really not happy that they took advantage of me and so many others."

Echo Law partner Andrew Paull said the total extra costs paid by Toyota Finance customers was estimated to be in the hundreds of millions of dollars.

"This class action is about holding Toyota Finance to account for putting in place dealer loan arrangements that it knew were unfair and against the interest of Toyota customers," Mr Paull said.

"Most concerningly, it appears that these practices resulted in vulnerable customers, such as those with low financial literacy, paying the most inflated interest rates. Some of these loans are continuing today."

Flex commission arrangements were banned in late 2018, following the banking royal commission.

Mr Paull said Australia's biggest car lender, Toyota Finance, had escaped scrutiny for the same behaviour that landed the big banks in hot water.

Proceedings have been lodged in the Supreme Court of Victoria and Toyota Finance will now be required to file its appearance before the parties attend a case management hearing.

A Toyota Finance spokesperson acknowledged the class action had been served. "We will take the time to review the claim carefully before making any statement," the spokesperson said.