When a borrower falls into default of payment under a loan enforcement expenses and default interest will usually increase the balance of the loan. Sometimes enforcement expenses such as the cost of hiring a repossession agent or debt collector to visit the borrower’s home or make phone calls to the borrower, or the cost of hiring a tow truck driver to assist in repossessing a vehicle can be considerable.
In certain circumstances, enforcement expenses charged to the borrower may be unreasonable and excessive. For Example, if an agent has made a number of fruitless visits to an address which the borrower had disclosed on the contract, each of these visits will be charged to the contract, If it can be proven that the borrower advised the lender of a new residence and therefore the lender was incorrect in sending the agent to the old address, all expenses associated with the visits to the old address would be unreasonably incurred. Conversely, if the fruitless visits were the result of the borrower failing to advise of a new address, the expenses will all be recoverable lawfully.
If unreasonable enforcement expenses have been charged to a borrower, application to the Credit List of the Victorian Civil and Administrative Tribunal can be made by the borrower under section 99 of the Consumer Credit (Victoria) Code asking for a determination of the borrower’s liability or a refund of amounts already paid.
Information provided by Consumer Credit Legal Service