Finance company to refund 1200 customers
Allied Nationwide Finance has settled with the Commerce Commission in an out-of-court agreement to refund $173,000 to more than 1200 customers.
Friday, February 15th 2008, 11:49AM
The finance company, part of the Allied Farmers group, charged some customers an "unreasonably high" repayment fee when they repaid their motor vehicle loans early, between April 2005 and August 2007. The fee equated to 31 days' interest on the outstanding balances of their loans at the time of full repayment.Allied Nationwide admitted that this conduct was in breach of the Credit Contracts and Consumer Finance Act, which requires that repayment fees charged by creditors must accurately reflect the costs incurred by the creditor.
John Mallon, Chief Executive of Allied Nationwide, said "We have cooperated fully with the Commerce Commission and believe it is entirely appropriate to refund the amounts incorrectly charged".
Commerce commission chairman Paula Rebstock believes, "the act is clear that credit fees applied to consumer credit contracts must be reasonable."
The commission has issued warning letters to other creditors whose formulae were considered in breech of the act.
Allied Nationwide's credit contracts were with Prime Finance, which amalgamated with other entities to form Allied Nationwide in June 2007.
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