Investigations conducted by the Credit and Investments Ombudsman (CIO) during last quarter have resulted in compensation of more than $135,000 delivered by two residential lenders.
One lender was obligated to refund and/or waive over $107,000 charged to 584 loans after failing to deduct the reduced input tax credit from enforcement costs.
A second lender refunded almost $29,000 out of a total of $50,000 to 53 out of 92 consumers after overcharging in relation to break costs.
“The financial firm has so far only been able to contact 53 out of the 92 consumers. The financial firm and CIO are currently discussing next steps,” a spokesperson from CIO’s Systemic Issue Investigations team told Australian Broker
CIO is not in a position to disclose the identities of the two residential lenders as all dealings with financial firms and their clients are confidential, they said.
Both issues were identified by CIO case managers while investigating complaints made by consumers.
The leading category of misconduct investigated by the ombudsman during the quarter was responsible lending – a trend which has remained constant over prior quarters. Common issues in this area include:
- Failing to make reasonable enquiries about consumers’ requirements and objectives
- Failing to make reasonable enquiries into consumers’ financial positions
- Failing to implement adequate verification steps
- Failing to refute the presumption of unsuitability
The CIO also investigated cases involving misrepresentation, financial hardship and poor complaint handling processes.
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