The Australian Competition and Consumer Commission Chairman has moved to protect West Australian home buyers from incorrect information by accepting legally enforceable undertakings from Bank of Western Australia Limited (BankWest)
ACCC Chairman, Professor Allan Fels, said that the ACCC had investigated a complaint regarding representations allegedly made by one or more employees or agents of BankWest that during July 1996 some West Australian customers using BankWest's Sales and Customer Management Unit's Home Loan Helpline were given incorrect information about home loans offered by non-bank lenders. After investigation by the ACCC, BankWest accepted that some information given to consumers was not correct in respect of some home loan products and financial services provided by one or more non-bank lenders.
BankWest will compensate any customer who has suffered financial loss as a result of representations made in contravention of the Trade Practices Act. BankWest admitted that the incorrect information given included that some, or all, non-bank lenders:
did not refund establishment fees if the home loan offer was not taken up; did not accept early or additional repayments on home loans; insisted early or additional repayments be made by mailed cheques; did not credit early or additional repayments on home loans daily, but only on the monthly or fortnightly due date of the repayment; did not offer flexible products such as personal loans; off set accounts; or redraw facilities; did not roll establishment fees and loan set up costs into the principal amount of the home loan; and tied borrowers to home loan contracts for a minimum of 7 years.
Professor Fels said, "The ACCC has warned banks in the past that we will not stand for any breaches of the Trade Practices Act through false and misleading representations affecting consumers within a state or nationally."
"BankWest has cooperated with the ACCC and as soon as it became aware of our concerns, BankWest took steps to ensure that all information given in response to enquires about non-bank lenders was correct and not misleading." "Further, BankWest has launched advertising offering compensation to customers who believe they were mislead by representations made by staff of the Sales and Customer Management Unit and will conduct a review of its internal trade practices compliance program with the ACCC. BankWest will also develop an information pamphlet for distribution to intending home buyers, which will contain information on bank and non-bank lenders home loan financial services." "The information pamphlet will be distributed to consumers through BankWest Customer Service Centres, the WA Ministry of Fair Trading and various government agencies."
ACCC Chairman, Professor Allan Fels, said that the ACCC had investigated a complaint regarding representations allegedly made by one or more employees or agents of BankWest that during July 1996 some West Australian customers using BankWest's Sales and Customer Management Unit's Home Loan Helpline were given incorrect information about home loans offered by non-bank lenders. After investigation by the ACCC, BankWest accepted that some information given to consumers was not correct in respect of some home loan products and financial services provided by one or more non-bank lenders.
BankWest will compensate any customer who has suffered financial loss as a result of representations made in contravention of the Trade Practices Act. BankWest admitted that the incorrect information given included that some, or all, non-bank lenders:
did not refund establishment fees if the home loan offer was not taken up; did not accept early or additional repayments on home loans; insisted early or additional repayments be made by mailed cheques; did not credit early or additional repayments on home loans daily, but only on the monthly or fortnightly due date of the repayment; did not offer flexible products such as personal loans; off set accounts; or redraw facilities; did not roll establishment fees and loan set up costs into the principal amount of the home loan; and tied borrowers to home loan contracts for a minimum of 7 years.
Professor Fels said, "The ACCC has warned banks in the past that we will not stand for any breaches of the Trade Practices Act through false and misleading representations affecting consumers within a state or nationally."
"BankWest has cooperated with the ACCC and as soon as it became aware of our concerns, BankWest took steps to ensure that all information given in response to enquires about non-bank lenders was correct and not misleading." "Further, BankWest has launched advertising offering compensation to customers who believe they were mislead by representations made by staff of the Sales and Customer Management Unit and will conduct a review of its internal trade practices compliance program with the ACCC. BankWest will also develop an information pamphlet for distribution to intending home buyers, which will contain information on bank and non-bank lenders home loan financial services." "The information pamphlet will be distributed to consumers through BankWest Customer Service Centres, the WA Ministry of Fair Trading and various government agencies."