Credit fees and charges: Frontloading of fees
View whole document on one page
View the whole document as a PDF
| Q.7 Should the CCCFA prevent fees for future services from being frontloaded into the start of the credit contract? |
Generally consumer representatives supported the prevention of frontloaded fees being a part of a credit contract.
Some of the lending industry commented that more detail is required as certain situations for front loading could be acceptable, including insurance and certain fees.
The banking industry did not support the proposal, citing periodic fees for credit card collections would be an administrative burden and cost.
The wider lending industry indicated an understanding of the proposal and appeared to accept that where a service has not been rendered it should not be charged but where, for example, a lender pays insurance on behalf of a borrower this should be able to be charged for immediately.
