Recommendation - 21 September 2017

Key Issues: 

Fees and charges applied to loan account on repossession of vehicle incorrect or excessive | Faulty vehicle | Breach of responsible lending | Unaffordable loan

Case summary

Except in relation to an error where the FSP has overcharged the consumer by $35,we find the consumer’s claim that the FSP’s charges in relation to the repossession of the vehicle were excessive has not been established.

We find the consumer’s claim that he experienced ongoing faults with the vehicle to be outside our jurisdiction.

Although not introduced as a claim by the consumer, in circumstances where the consumer appeared to have difficulty meeting his repayments immediately after the loan was drawn down, we have considered whether the FSP complied with its responsible lending obligations in providing the loan to the consumer.

In this regard, we find that the loan was unsuitable in that the consumer was unable to meet the loan repayments or would only have been able to do so with substantial hardship.

Consequently, we recommend that the FSP:

  • waive in full the debt owing under the loan contract,
  • cancel the loan contract,
  • reimburse the consumer in the amount of $11,399.41, being the amount the consumer has overpaid, and
  • remove and/or refrain from lodging any adverse listings on the consumer’s credit files in relation to the loan contract.

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