Australian Finance Direct Limited v Director of Consumer Affairs Victoria

Australian Finance Direct Limited appealed against the decision of the Victorian Civil and Administrative Tribunal, which found that the company had breached sections 15(B), (C), (D), and (E) of the Consumer Credit (Victoria) Code. The tribunal found that the company had failed to disclose to borrowers the deduction of a “holdback” amount from the loan remitted to the supplier of the service. The tribunal ordered the company to pay compensation to affected borrowers and to publish a notice of the breach on its website. The company argued that the holdback was not required to be disclosed as it was not a charge or fee imposed on the borrower.

The court considered whether the holdback deduction was a “charge” or “fee” within the meaning of the Consumer Credit (Victoria) Code. The court found that the holdback was not a fee or charge imposed on the borrower but was rather a deduction from the amount of the loan remitted to the supplier of the service. The court held that the holdback was not required to be disclosed to the borrower as it did not directly affect the borrower’s obligations under the loan contract. However, the court found that the company had failed to provide adequate information to the borrowers about the holdback deduction, which breached the disclosure obligations under the Consumer Credit (Victoria) Code. The court found that the holdback deduction was not adequately disclosed in the loan agreement and that the company had failed to provide the borrowers with the necessary information to make an informed decision about the loan.

The court found that the company’s failure to disclose the holdback deduction was a serious breach of the Consumer Credit (Victoria) Code. The court found that the company’s conduct was misleading and deceptive and that the company had failed to act in the best interests of the borrowers. The court held that the company was liable to pay compensation to affected borrowers and to publish a notice of the breach on its website. The court dismissed the appeal and upheld the decision of the Victorian Civil and Administrative Tribunal.