RHG Mortgage Corporation to refund $3.3 million
The company formerly known as RAMS Mortgage Corporation will refund more than $3.3 million to its customers after charging what the regulator considered unfair early termination and discharge fees.
The Australian Securities and Investments Commission (ASIC) said early termination fees the RHG Mortgage Corporation charged on its Interest Saver products were increased for existing clients from $1,400 in the first year (reducing to $700 in the third year) to a flat fee of $2,000 in the first three years.
Furthermore, discharge fees were increased for existing clients from $590 to $990.
ASIC took action after receiving a significant number of complaints and RHG agreed to refund the $3.3 million, reduce its discharge fees on existing loans and gradually remove early termination fees for thousands of customers going forward.
"ASIC has been active in monitoring early termination fees," ASIC Commissioner Peter Kell said. "In 2010 we published regulatory guidance on how we would apply the National Credit Code restrictions on fees, and we have been conducting an industry review of early termination fees and will publish a report with detailed findings before the end of the year."
RHG has no association with the business currently conducted under the RAMS brand name, which was sold to a third party in 2007.
Recommended for you
ASIC has permanently banned a former Perth adviser after he made “materially misleading” statements to induce investors.
The Financial Services and Credit Panel has made a written order to a relevant provider after it gave advice regarding non-concessional contributions.
With wealth management M&A appetite only growing stronger, Business Health has outlined the major considerations for buyers and sellers to prevent unintended misalignment between the parties.
Industry body SIAA has said the falling number of financial advisers in Australia is a key issue impacting the attractiveness and investor participation of both public and private markets.
