More cash for consumers in credit hot water - Avco to pay $85,000

18/8/04
The Commercial Tribunal has awarded a civil penalty of $85,000 and costs of $5,000 against Avco Financial Services Limited following contraventions of the Credit Act.
Consumer and Employment Protection Minister John Kobelke said the penalty would benefit community agencies that provided credit related services to consumers.
"Not only does the ruling provide integrity and strength to credit laws, but it is good to know that such a penalty will help deliver important information to consumers," Mr Kobelke said.
"There is also a message here that our community expects even big financial corporations to conduct business responsibly and with due care and skill."
The Minister said the penalty payment of $85,000 was for Avco's errors in a number of consumer credit contracts prior to 1997.
Avco is now owned by GE Consumer Finance.
"This penalty is in addition to a civil penalty payment of $319,250 awarded against Avco earlier this year for other problems in credit contracts it wrote in Western Australia," he said.
The earlier errors included Avco's failure to disclose insurance commissions, failure to ensure that customers signed their contracts and failure to disclose other fees and credit charges.
Mr Kobelke said, unlike some other types of fines or penalties, the money was to be specifically directed into the relevant area and in this case that was consumer credit advice.
"The funds will go towards supporting financial counselling services to consumers, legal advice about consumer credit or information about consumer credit," the Minister said.
Minister's office: 9222 9211