finPOWER Connect Newsletter

High Court credit fees judgment clarifies rules for lenders

On 21/10/2014 the High Court released a judgment that further clarifies the rules that lenders must comply with when charging credit fees to borrowers.

The judgment is the second issued with respect to ongoing proceedings taken by the Commerce Commission against two NZ based finance companies. The Commission has alleged that the companies charged unreasonable establishment fees, account maintenance fees, and arrears fees to borrowers of motor vehicle finance, in breach of s 41 of the Credit Contracts and Consumer Finance Act 2003 (CCCFA).

Chairman Dr Mark Berry said this case is the latest word on how credit fees may be calculated, and the facts provide good case-studies for lenders to consider.

The High Court judgment can be found here:

http://www.comcom.govt.nz/consumer-credit/consumer-credit-enforcement-responses/enforcement-response-register-consumer-credit/detail/847

The earlier judgment of September 2013 can be found here:

http://www.comcom.govt.nz/consumer-credit/consumer-credit-enforcement-responses/enforcement-response-register-consumer-credit/detail/846