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Car loan lender to repay $440k

NZ NewswireNZ Newswire 5/04/2016

A Christchurch finance company that overcharged customers on their car loans will pay back at least $440,000 after a settlement with the Commerce Commission.

Dealer Finance breached the Credit Contracts and Consumer Finance Act 2003 (CCCFA) because it did not credit borrowers who accelerated or paid lump sum amounts to their loan as soon as practicable.

Around 5,800 loans issued between 2005 to 2015 were affected.

Consumer manager John Lyall says calculating interest correctly is a core responsibility of lenders and the Commerce Commission expects them to get it right.

"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.

Current loans affected have been adjusted following the Commission's investigation while eligible customers who are already paid up can get in contact with the company for a refund.

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