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Over the last four years Real Finance has been voluntarily co-operating with The Commerce Commission (the overseer of legislation relating to our consumer credit contracts – the Credit Contracts and Consumer Finance Act 2003), in investigating whether three major fees types that we have charged to our customers over the period 01/04/2013 to 31/03/2020 were reasonable or not.
During the course of this investigation Real Finance employed a forensic accountant from our accounting firm Deloitte to examine the fee setting model that we have built and used, to eliminate errors or incorrect methodology and develop the model further to ensure that in the future, you, our most valued and important clients, do not incur any fees which are unreasonable.
The analysis, after much discussion between the parties involved, has helped us determine that we have used some incorrect methodology to determine the costs to us, and therefore part of the costs passed onto some of our clients through the following fees over this period:
Establishment Fee: This is the fee associated with establishing your loan, including processing and approving your loan application, identity verification requirements, budget preparation and analysis, risk and collateral analysis, documenting the loan, providing and explaining the documentation to you and any other party in full and then providing you with the loan funds once you have signed up and returned all documentation.
Monthly Administration Fee: This is the monthly cost of keeping your loan account active, including providing you any mandatory loan statements, running repayments, and any other administrative tasks needed, and is debited to your account at the end of each month
Default Fee: Charged each month that your loan is in arrears.
The result of this is that the portion of each fee which was incorrectly charged will be returned to you shortly, along with an amount of interest associated with each fee, and the difference between the date it was charged to your account, and the agreed settlement date.
Existing Customers
For those customers who have existing loan balances, we will shortly begin crediting your current loan account with the amount of reparation due, reducing your existing balance.
In some cases, this may end your loan obligations and put your account into credit, and we will notify you each individually with the outcome and make suitable arrangements to refund you any overpaid amount.
Previous Customers
For those of our customers who were unreasonably charged an amount relating to the fee types above and who do not currently have an open loan account, we will make endeavours to contact you using the details we have on file, to organise a refund of the amount due to be returned to you.
Future Loan documentation will allow for the fluctuations that will occur as a result of the changes to our costs. We will let you know of any changes in detail and as soon as we become aware of them by sending you written notice.
Real Finance sincerely apologizes for the inconvenience arising as a result of your loan account (in some cases multiple accounts) receiving partially unreasonable fee charges.
If you have any concerns please contact us directly through our Free Phone number 0800 21 21 21 option 1.
Sincerely,
Real Finance Limited
“Real Finance listened to what I wanted, understood my requirements, then delivered a solution that was fit for my purposes first and foremost.”
