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
The regulator has convened multiple sitting panels of the FSCP regarding AFSL breach reports which have identified poor superannuation advice from financial advisers.
One licensee has lost 27 advisers in the past week, now sitting at zero, according to the latest Wealth Data figures.
AFCA remains firm on its stance that industry failures occurring in the financial advice sector are fundamentally an advice issue, rather than a product issue.
A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and professionalism”.
