InHouse Finance Group, a vehicle finance lender that provides finance for vehicles purchased from Best Buy Autos, has been caught charging consumers a higher rate than is allowed under the National Credit Act.
An Australian Securities and Investments Commission (ASIC) investigation found that the financier required consumers who were unable to pay a deposit of 80% to purchase a warranty product.
This warranty purchase was then included in the amount borrowed and increased the annual percentage rate for their loan.
ASIC found that some consumers were being charged a rate of 90% p.a., exceeding the 48% p.a. maximum.
Following ASIC’s investigation, Inhouse Finance Group has stopped requiring its customers to purchase the warranty and will contact the 177 affected consumers to explain what refund they might get or if their loan repayments or term will be reduced.
ASIC deputy chair Peter Kell says it’s the responsibility of credit licensees to understand the maximum rates they are able to charge.
“As this case demonstrates, practices that require a consumer to purchase an additional product when taking out a loan may result in a lender entering into a contract where it is charging more than the maximum allowable under the law,” Kell says.
“Such practices may harm consumers as it can result in the consumer borrowing more than they can afford – especially because they are primarily focussed on purchasing the car and financing that purchase.”
Consumers concerned about their loan can contact Inhouse Finance Group on (02) 9272 9047.
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