Company fined one hundred thousand dollars over fees charged to customers
An Australian company has been charged a whopping one hundred thousand dollars after it was found to have been breaching the consumer code when offering loans to people to attend seminars.
According to a recent report an Australian lender has been fined a massive one hundred thousand dollars. The company was fined as a result of breaching the consumer code when offering loans to consumers to attend seminars that were run by the property developer, Henry Kaye. The lender, Australian Finance Direct, was offering the loans to people to attend the seminars, which were run by Mr Kaye’s National Investment Institute. The institute went bankrupt in 2004.
The Victorian Civil and Administrative Tribunal found that when Australian Finance Direct offered the loans to people to attend the seminars it also charged them a hold back fee, which was then kept by the company. However, this hold back fee was not disclosed to the borrower. The amount of the hold back fee is said to have varied, according to officials, and ranged from ten percent to as high as forty percent on higher risk loans.
The figures showed that in total nearly two and a half thousand Australian consumers had entered into contracts with Australian Finance Direct. This included around eleven hundred consumers from Victoria. Tony Robinson, the Victoria Consumer Affair Minister said that the breach of the consumer code by Australian Finance Direct was both serious and deliberate. He added: “Consumers are entitled to know the real cost of borrowing so they can make meaningful comparisons with other financial products and make informed decisions about whether or not to go into debt.”