Heartland New Zealand's Marac Finance unit, which was one of three lenders which merged to create Heartland, has refunded more than half a million dollars over unpaid loan repayment insurance rebates in a settlement with the antitrust regulator.
The Heartland subsidiary refunded $567,000 to 1,000 customers who repaid auto-loans early between 2006 and 2010 but weren't refunded the rebate on insurance premiums on the loans, the Commerce Commission said in a statement. The regulator took a look at the matter after receiving a complaint in 2010, and Marac immediately changed its practices.
The regulator believed Marac breached the Credit Contracts and Consumer Finance Act by not refunding insurance premiums, and that it probably misled customers by telling them the insurance would be rebated. Marac didn't agree it breached the act or misled customers.
"We are pleased that Marac has agreed to do the right thing by its customers and make these payments," general manager of competition Kate Morrison said in a statement. "We saw a settlement as a timely and cost effective way of achieving the right result."
Marac's parent Heartland reported a 9.2 per cent lift in first-half profit today to $.98 million as income rose 15 per cent and costs were cut by 10 per cent. Heartland's shares rose 1.4 per cent to 74 cents in trading today.