High Court credit fees judgment clarifies rules for lenders

Media release - High Court credit fees judgment clarifies rules for lenders
Issued 22 October 2014
Release No. 41
High Court credit fees judgment clarifies rules for lenders

The High Court yesterday 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 in ongoing proceedings taken by the Commerce Commission against Sportzone Motorcycles Limited (in liquidation) (Sportzone) and Motor Trade Finances Limited (MTF).

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.

MTF and Sportzone have appealed both judgments. Those appeals will be heard in the Court of Appeal on 19 and 20 November.

The High Court judgment can be found here: www.comcom.govt.nz/enforcement-response-register-consumer-credit/detail/847

The earlier judgment of September 2013 can be found here: www.comcom.govt.nz/enforcement-response-register-consumer-credit/detail/846

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