Huge bill for finance firm

Christchurch Car Finance company Dealer Finance Limited has been ordered by the Commerce Commission to pay back or credit at least $440,000 to overcharged customers during the last 10 years. Owned by a group of Christchurch car dealers, Dealer Finance provides funds under consumer credit contracts so they can buy vehicles. However, on loans dating back to 2005, many customers were overcharged interest. The Commerce Commission has just announced that Dealer Finance breached the Credit Contracts and Consumer Finance Act 2003 for failing to credit borrowers’ accelerated or lump sum payments to their loan as soon as practicable. This meant that customers were charged interest on an incorrect unpaid balance. It is estimated that around 5,800 loans were affected. Dealer Finance has already adjusted the current loans affected and is currently contacting those who have paid off their loans and were overcharged by $200 or more. Other affected customers who get in contact and provide necessary details will also be refunded. Those who may be eligible for a refund would have had a loan through Dealer Finance or one of the car dealers listed below between April 2005 and April 2015 and made accelerated or lump sum payments. Those with a current Dealer Finance loan should have had theirs adjusted already, with any refunds. Auckland Consumer Manager John Lyall said: “All lenders should be aware of their legal responsibilities when offering consumer credit contracts to borrowers. Calculating interest is part of the core business of lenders and we expect them to get it right. “However, in this instance Dealer Finance accepted it had breached the law and it has taken steps to fix the problem and has agreed to provide compensation to affected customers."

Affected dealers