Credit fees and charges: Third party fees
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| Q.8 Is there a need to change the timeframe under section 41 of the CCCFA for applications to annul or reduce a fee? |
Consumer representatives supported an increased time frame.
On the other hand, the banking industry did not support an extension citing one year being long enough for a consumer to make a claim. The wider lending industry had a similar view, though a couple of submitters from this group suggested 18-24 months could be considered.
A submission from the motor vehicle industry, whose members can be involved in motor vehicle financing, supported an extension on the basis that enforcement action can relate to non-compliant activity; whereas an industry group which also has members directly involved in motor vehicle financing was against any change to the timeframe.
| Q.9 Should the CCCFA be amended to provide that fees or charges may only be passed on by a creditor if from an arm's length third party? |
Submitters generally accepted that fees may only be passed on to the borrower if the third party is at arm's length from the lender and that fees that do not meet this test should be subject to the reasonable fee tests of the CCCFA. The Law Society suggested the CCCFA be specifically amended to make this clear. Submitters suggested the definition of arm's length would need to be very clear. Consumer groups that commented on this proposal all expressed their support.
