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GE Money admits breach of Fair Trading Act, will repay NZ$3.1m

GE Money admits breach of Fair Trading Act, will repay NZ$3.1m

GE Money admitted breaching the Fair Trading Act and will repay NZ$3.1 million in incorrectly charged interest to 3,660 customers. In an out of court settlement with the Commerce Commission, GE Money admitted that it had misled customers during a promotion through Noel Leeming and Bond and Bond between October 2005 and February 2006.During the 'Pay Nothing Until July/August 2007"˜ promotion, customers were provided finance for a term of three years and were not required to make any payments until an "˜early exit' date (generally 17 months after the purchase date). Customers who chose to repay their loan in full by the "˜early exit' date were only required to pay the purchase price and credit fees, without any interest. However, after the "˜early exit' date customers were required to pay instalments that included interest calculated from the date of purchase. This was despite the loan contract stating that there was an interest free period of 17 months, and the contract's terms and conditions noting that interest commenced at the end of the interest free period. Finance for the promotion was provided by Pacific Retail Services, which was purchased by GE Money in February 2006. In addition to the repayment, GE Money agreed to pay interest on amounts overpaid at the 90 day deposit rate. Commerce Commission Chair Paula Rebstock said that: "GE Money has been cooperative with the Commission since the commencement of this investigation. It was not the promoter of these contracts, and has sought to work with the Commission to remedy this breach once the error came to its attention."

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