January 17, 2018
Debt collection group Receivables Management has agreed to credit more than $1.4 million to about 1700 customers who were wrongly charged interest, costs and fees on loans after their goods had been repossessed and sold.
This follows a Commerce Commission investigation into whether the group breached the Fair-Trading Act by incorrectly claiming it had the right to charge interest, costs and fees to loan balances after the repossession and sale of consumer goods.
This conduct was prohibited by the now repealed Credit (Repossession) Act 1997 and is now unlawful under the Credit Contracts and Consumer Finance Act 2003.
The Receivables Management group includes Receivables Management (NZ) Limited, Southern Receivables Limited, Allied Recoveries Limited, and RJK Receivables Limited.
No double dipping
“When borrowers are in default, lenders essentially have a choice between issuing proceedings and continuing to charge interest and fees or repossessing secured goods which freezes the amount owed under the loan. They can’t repossess and continue to charge interest and fees,” General Manager, Competition and Consumer Antonia Horrocks said.
Refund by March
Receivables Management has agreed to refund all affected borrowers by the end of March 2018. If customers are owed a cash refund, they will be entitled to an additional 5% of the interest and fees charged for not having had use of the money.
“We are pleased that Receivables Management is crediting refunds to affected customers. The group has cooperated throughout our investigation and is taking steps to ensure it does not happen again,” Ms Horrocks said.
A copy of the settlement agreement can be found on our website.
Borrowers who believe they are owed a refund should contact the companies directly.