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CUDRC approach to default fees - June 2007
In recent times there have been reports in the media regarding the level of default fees charged by banks and other financial services providers in certain situations, such as late payment fees or dishonour fees. As a result of these media reports, a number of calls have been received at the Credit Union Dispute Resolution Centre (CUDRC) regarding the level of default fees.
The CUDRC considers complaints made about credit unions that are members of the scheme. Where a complaint relates to a fee, the CUDRC will consider whether the fee was properly disclosed to the member, whether the fee was correctly charged in accordance with the member’s contract with the credit union and whether it was correctly applied in accordance with any scale of fees used by the credit union.
Under our Terms of Reference, we cannot consider the amount of a fee so far as it relates to a policy or practice of a credit union, unless that policy or practice is in breach of a specific obligation or duty to the member. The level of any disclosed default fee is a matter of credit union policy that this office is unable to review.
The CUDRC’s Terms of Reference are set by the Board of the Scheme after consultation with all stakeholders. The Board is comprised of equal numbers of consumer and industry directors and an independent Chair.
CUDRC approach to default fees - June 2007
In recent times there have been reports in the media regarding the level of default fees charged by banks and other financial services providers in certain situations, such as late payment fees or dishonour fees. As a result of these media reports, a number of calls have been received at the Credit Union Dispute Resolution Centre (CUDRC) regarding the level of default fees.
The CUDRC considers complaints made about credit unions that are members of the scheme. Where a complaint relates to a fee, the CUDRC will consider whether the fee was properly disclosed to the member, whether the fee was correctly charged in accordance with the member’s contract with the credit union and whether it was correctly applied in accordance with any scale of fees used by the credit union.
Under our Terms of Reference, we cannot consider the amount of a fee so far as it relates to a policy or practice of a credit union, unless that policy or practice is in breach of a specific obligation or duty to the member. The level of any disclosed default fee is a matter of credit union policy that this office is unable to review.
The CUDRC’s Terms of Reference are set by the Board of the Scheme after consultation with all stakeholders. The Board is comprised of equal numbers of consumer and industry directors and an independent Chair.
