The Commission’s study of 215 lenders’ websites found that 46 or 21% of the lenders included in the review potentially failed to comply with one or more of their obligations to clearly and prominently display costs of borrowing, standard form contract terms, and to accurately represent a borrower’s cancellation rights.
Commissioner Anna Rawlings said failure to disclose this information breached the CCCF Act and “deprives consumers of information that would assist them to make informed credit choices”.
“We contacted all of the lenders covered by the review to remind them of their responsibilities. While most lenders have shown a willingness to make changes, we will be checking back later in the year and will consider further action if they have failed to comply,” she cautioned.
- Whether the lender had published its standard form contract terms and costs of borrowing clearly and prominently as required under the law;
- What the lender had represented about the borrower’s right to cancel the contract;
- The number of fees charged, their names and the amount charged; and
- The published interest rate for each lender.
The Commission says the CCCF Act does not cap interest rates, prescribe how lenders should name fees or impose a limit on the number of fees a lender may apply.
“We observed significant variation in interest rates and fees. The review found interest rates ranging from no interest at all, all the way through to 803% per annum. We also found more than 500 names used for fees ranging from $5 to $5000,” Rawlings said.
“Overall, this review provides a good insight into the information being provided to consumers and some of the difficulties consumers may face in trying to access and understand the true costs of borrowing, comparing lenders, and making informed borrowing decisions.”