Hello All,
I'm seeking some comments and advice on this issue.
I've had a variable rate investment loan secured against my property since 2000 with Wizard (now owned by AMS).
In the original contract the exit fee (called a security discharge administration fee) is clearly stated in the table of fees and charges as "Nil". It was one of the marketing points of the loan, and reasons I chose it, at the time it was one of the lowest cost investor loans in the market and promoted as such.
I recently sold the investment and wanted to pay out the loan and discovered they had varied the loan exit fee to $350. When I complained they told me to refer to the part of the contract that allows them to unilaterally change any term of the contract including fees and charges.
Now my understanding is that financial institutions can vary variable interest rates and ongoing account keeping fees and similar charges with due notification.
However the exit fee is bit different in my opinion. Firstly, it is a charge I presume most investors want to know "before entering the contract". It is also a once off charge which can vary by hundreds and sometimes thousands of dollars between Financial Institutions. It is something you want to know is set, and not subject to change. If it is subject to change or to be determined - it should be clearly stated as so.
Maybe AMS are legally allowed to change the exit fee, if that is the case what is stopping them from charging a much greater amount than $350 β why stop at that amount itβs not uncommon to see exit fees several times this amount. If this is correct the contract seems grossly unfair and lopsided to me. At the very least this is a breach of goodwill by lender.
Does anyone think I have any grounds to challenge this fee with the Credit Ombudsman Service?
I appreciate any feedback on this matter.
Cheers,
Kevin