“The importance of lenders adhering to disclosure requirements is undeniable.”
Vanessa Horne is the Commerce Commission general manager for competition, fair trading and credit.
She said this was a particularly important case as the Commission had prioritised its protection of vulnerable consumers.
“One of the Commission’s enforcement priorities is to take action where we consider motor vehicle finance lenders have not met their obligations under the CCCFA,” Horne said.
“We are particularly focused on motor vehicle lenders who are providing credit to vulnerable consumers,” she said.
“For many Kiwis, the purchase of a car is one of the biggest financial commitments they will make.
“The CCCFA is there to protect consumers when they borrow money or buy goods on credit, and under the CCCFA, consumers have a right to be provided upfront information about any changes to their loan.”
Horne said the commission was considering this sentence as a win.
“The Commission considers this to be a win for consumers and borrowers affected by El Cheapo’s failures, who may be entitled to compensation.
“This case should send a strong signal to motor vehicle financiers that non-compliance with disclosure obligations will not be tolerated.
“Transparency and accountability are fundamental to responsible lending and are key to building consumer trust and upholding market integrity,” Horne said.
The commission said it would reach out to affected parties shortly. Borrowers with a loan from El Cheapo Cars which was varied between 2015 and 2021 may be eligible for compensation, Horne said.
Raphael Franks is an Auckland-based reporter who covers business, breaking news and local stories from Tāmaki Makaurau. He joined the Herald as a Te Rito cadet in 2022.
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