Baycorp Welcomes Commerce Commission Settlement
Baycorp Welcomes Commerce Commission Settlement
New Zealand’s largest debt recovery and credit
management firm Baycorp welcomes today’s settlement with
the Commerce Commission in relation to fees and charges on
some debtor accounts, where security for the debt had been
repossessed and sold.
Baycorp Chief Executive Grant Jorey said: “Baycorp is committed to honesty, integrity and legislative compliance in all our dealings. Over half a century, we have established ourselves as the market leader in New Zealand debt recovery and credit management, thanks to our strict adherence to our values and the quality and efficiency of our services.
“Despite this record, fees and other charges were inadvertently added to 2,370* debtor accounts from whom the debt security had been repossessed by some of our clients before the debt was referred to Baycorp.
“Our clients – rather than ourselves – were the beneficiaries of these fees and charges.
“As soon as we became aware of the issue, and well ahead of today’s settlement, we voluntarily rescinded all charges on the affected accounts. After this, all but 80 accounts remained in debt. Those accounts promptly received, at Baycorp’s expense, refunds totalling $46,071,” Mr Jorey said.
In addition, to prevent recurrence Baycorp has:
• Made changes to our system requiring creditors to identify the balance before and after a repossession, the date of repossession, and the costs of repossession activity with any comments;
• Introduced a manual review of all new accounts at the point of receiving instructions from clients, to ensure appropriate treatment is applied from the outset of each new account; and
• Worked with our clients to increase awareness about the CRA and how it affects their business and their relationship with Baycorp.
“Baycorp has cooperated fully throughout its
investigation. Still, the Commission has alleged the
addition of these fees and charges contravened the Credit
(Repossession) Act 1997 (CRA)**. It further alleged their
addition breached the Fair Trading Act 1986 (FTA) because it
wrongly implied a right to charge them,” Mr Jorey said.
“We disagree with the Commission’s view and we accept no liability. But in order to draw a line under this matter, we have agreed to settle and pay the Commission’s costs of $11,651. Accordingly, the Commission has closed its investigation.
“Baycorp and the Commission agree this issue has arisen because of a lack of awareness by credit providers that the CRA applies to them. We support the New Zealand Law Commission’s recommendation to incorporate the provisions of the CRA into the Credit Contracts and Consumer Finance Act. This will go a long way to alleviating the widespread unfamiliarity with the Act.
“Baycorp is committed to understanding the implications of legislation on our business and on our clients, and to working with industry bodies and legislators to ensure compliance. Our prompt actions since this issue came to light show we are true to our word,” Mr Jorey said.
ends