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The ACCC has approved the Wizard / Aussie arrangement whereby deferred establishment fees will be waived for Wizard customers choosing to refinance with Aussie.
The arrangement, which formed part of the negotiations between GE Money subsidiary AMS Mortgage Services and Aussie Home Loans, following the sale of Wizard to Aussie several months ago, resulted in a number of complaints from borrowers and industry members.
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While the ACCC noted that the arrangement involved third line forcing – a type of conduct prohibited by the Trade Practices Act 1974 – it said it would allow the deal on the grounds that public benefits outweighed public detriment.
“The ACCC considers the arrangement will result in cost savings for customers who choose to refinance with Aussie, by relieving them of their contractual commitment to pay the deferred administration fee,” ACCC chairman Graeme Samuel said on Friday.
Under the arrangement Wizard customers have 12 months to refinance with Aussie (as of 1 March) and benefit from the fee waiver, while other GE Money funded loans via third parties such as originators and brokers will have a three month waiver period from 1 March.
The ACCC also noted that it remained concerned about AMS’ service and decision not to pass on rate reductions to customers and would continue to investigate the issue.
