Mainland Finance repays $1.1m in unreasonable fees
2000 loans found to have unreasonable costs.
Car finance company Mainland Finance is repaying $1.1m to customers after admitting it charged unreasonable fees on about 2000 loans.
Customers were charged loan establishment fees between $495 and $595. The company also charged between $95 and $295 for a top-up loan.
A $5 weekly administration fee and 11 types of default fees were also found to be unreasonable.
Fees were overcharged on loans entered into between 1 April 2015 and 30 March 2019.
Under consumer credit law, any fees charged by lenders must be reasonable.
In a settlement with the Commerce Commission, Mainland Finance admitted the fees were unreasonable and agreed to compensate borrowers.
Customers will be paid the difference between the fees they were charged and what the commission estimated should have been charged.
The amount to be repaid to borrowers comprises $366,500 in establishment fees, $489,600 in administration fees and $249,600 in default fees.