The Commerce Commission has reached a settlement with motor vehicle lender, Dealer Finance Limited (Dealer Finance), to pay back or credit at least $440,000 to customers who were overcharged interest on their loans from 2005.

Dealer Finance is owned by a group of Christchurch car dealers. It provides finance to borrowers under consumer credit contracts so that they can buy motor vehicles.

The Commission’s investigation found that Dealer Finance breached the Credit Contracts and Consumer Finance Act 2003 (CCCFA) because it did not credit borrowers’ accelerated or lump sum payments to their loan as soon as practicable. As a consequence, customers were charged interest on an incorrect unpaid balance. Around 5,800 loans were affected.

Auckland Consumer Manager John Lyall said, “All lenders should be aware of their legal responsibilities when offering consumer credit contracts to borrowers. Calculating interest is part of the core business of lenders and we expect them to get it right.”

“However, 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.”

Dealer Finance has already adjusted the current loans affected and it is working on contacting people who have paid off their loans and who were overcharged $200 or more. It has also agreed to refund other affected customers who contact them and provide necessary details.

You may be eligible for a refund if you had a loan through Dealer Finance or one of the car dealers listed below between April 2005 and April 2015, and you made accelerated or lump sum payments. If you have a current loan with Dealer Finance your loan balance should have already been adjusted with any refunds.

If you think you might be entitled to a refund and haven’t been contacted by Dealer Finance you can email them at enquiries@dfl.co.nz.

Background

The settlement agreement with Dealer Finance Limited is available on our Enforcement Response Register.

Affected dealers

TRUST CARS/CARTEL CARS

464 Ferry Road

Christchurch

73 Moorhouse Avenue Ltd

73 Moorhouse Avenue

Christchurch

Adams Bardsley Cars Ltd

130 Ferry Road

Christchurch

Affordable Caravans Limited

512 Blenheim Road

Christchurch

Austin Motor Company Limited

275 Colombo Street

Christchurch

Auto Parts Ltd T/a Auto International

240 Litchfield Street

Christchurch

Blackadder Motors (2004) Ltd

200 Ensors Road

Christchurch

Car City Christchurch Limited

206 Ferry Road

Christchurch

Carey Motors

185 Ferry Road

Christchurch

Cars 2 Go

260 Ferry Road

Christchurch

Chantilly Holdings Limited

200 Ensors Road

Christchurch

Cheyenne Wholesale Limited

20 Bucknell Street

Christchurch

Dennis Tullett Motors Ltd

422D Hereford Street

Christchurch

Economy Cars Limited

538 Moorhouse Avenue

Christchurch

First Class Cars & Commercials

12 Aldwins Road

Christchurch

Forsyth Motors

213 Main South Road

Christchurch

Gardner Cars

3 Moorhouse Avenue

Christchurch

Great Cars/The Car Bazaar 1 Ltd

Unit 3 1030 Ferry Road

Christchurch

John Sergel Cars Limited

265 Colombo Street

Christchurch

Johnston Motor Company Limited

213 Main South Road

Christchurch

Lifestyle Marine Limited

129 North Avon Road

Christchurch

Mecca Motors Limited

534 Moorhouse Avenue

Christchurch

Milligan Cars Limited (No 2)

69 Moorhouse Avenue

Christchurch

Moorhouse Express Limited T/A Car City Christchurch

206 Ferry Road

Christchurch

Motor Home Centre

449 Ferry Road

Christchurch

Nigel Thompson Motor Company Limited

175 Ferry Road

Christchurch

NZ Classic Cars T/A Neat Cars

301 Main South Road

Christchurch

Peter Keech Motors Ltd

208 Waltham Road

Christchurch

R B McGregor Limited

219 Waltham Road

Christchurch

R J Norman Investments Ltd T/A Ross McGregor Motors

219 Waltham Road

Christchurch

Riccarton Car Sales Ltd

134 Ferry Road

Christchurch

Rob Donaldson Cars

504 Moorhouse Avenue

Christchurch

Rob Lewis Motor Company

541 Moorhouse Avenue

Christchurch

Rutherford Cars No 2

31 Moorhouse Avenue

Christchurch

Simons Wholesale Ltd

20 Fitzgerald Avenue

Christchurch

Stadium Cars Limited

564 Moorhouse Avenue

Christchurch

Sun City Motors

2 Appleby Highway

NELSON

The Car Bazaar (No 3)

550 Moorhouse Avenue

Christchurch

Trade In Centre Ltd

200 Ferry Road

Christchurch

Waterview Cars - The Car Bazaar 4

Unit 3/1030 Ferry Road

Christchurch

Wayne Hill Motors Limited

313 Lincoln Road

Christchurch

Wayne Timms Motor Court Ltd

37 Formans Road

Christchurch