Fees and charges
Information on fees and charges associated with credit contracts and what to do if you think they are unreasonable.
Credit contracts usually have extra fees and charges added to the amount you borrowed. These must be reasonable and based on the actual costs of lending you the money.
If the creditor is charged a fee by a third party, for example a broker, or for a credit check, they must only charge you the actual amount they paid. This includes insurance if the creditor requires you to obtain it from a particular insurance company. The insurance should not include excessive commission.
The fees have to be listed with a clear explanation of what they are for. Some examples of types of fees are:
- referral or brokerage fees
- establishment, administrative or booking fees
- Personal Property Securities Register fees
- credit check fees
- legal fees
- dealer’s fee.
These fees can add huge amounts to your loan.
What if I think the fees in my credit contract are too high?
Ask the creditor to explain what the fees are for and how they came up with that amount. If you are not happy with their explanation, get advice from a community law centre.
See here for contact details of Community Law Centres.
If you can show a fee is unreasonable, the Disputes Tribunal or Court may reduce it.
For more information about fees see the consumer credit section on the Commerce Commission website or visit your local community law centre.
