Anthony Klan | The Australian | July 20, 2012
The Australian Securities & Investments Commission has forced lender RHG Mortgage Corporation, formerly RAMS, to refund more than $3.3 million it overcharged borrowers in discharge and early termination fees.
The regulator said some of RHG’s fees were “unconscionable or unjust” and it ordered repayments of between $50 and $10,000 to 6400 customers. Among instances of overcharging, RHG had increased discharge fees for existing borrowers from $590 to $990 and had increased early termination fees payable in the first three years from between $700 and $1400 to $2000 flat.
“RHG has also agreed to reduce its discharge fees on existing loans and to the staggered removal of early termination fees for thousands of customers going forward,” ASIC said in a statement.
RHG said it still expected to deliver a financial-year net operating profit of $39m-$44m, which it flagged in February.
ASIC said it had taken the action after receiving a “significant level of complaint”.
“RHG has started notifying customers who may be entitled to a refund as well as those current customers who will have their fees waived or reduced,” ASIC said.
“This will include refunds to customers of the portion of any discharge fee or early termination fee paid since July 1, 2010, above the originally contracted amount.”