New Zealand's Commerce Commission filed legal proceedings against UDC Finance Ltd. alleging that it charged unreasonable default fees.
The Commerce Commission filed High Court proceedings against UDC Finance. In the period covered in the proceedings, the company offered consumer loans of NZ$10,000 or more over terms of one to five years with the loans typically secured against assets such as vehicles.
The commission alleges that the company's dishonor fees and late payments fees were unreasonable. UDC Finance charged the dishonor fee if the borrower missed a scheduled payment and charged the late payment fee if the borrower missed payment 7 days after it was due. The commission alleges that each fee exceeded UDC Finance's costs and estimated losses related to a missed or late payment.
The commission is seeking a declaration that the company breached the Credit Contracts and Consumer Finance Act by charging unreasonable fees. It seeks compensation for borrowers for amounts paid in excess of a reasonable fee.
