Consumer affairs: Wizard Home Loans

Posted on 11. Mar, 2009 in Speeches

The matter I raise is also for the attention of the Minister for Consumer Affairs and is in regard to Wizard Home Loans customers. The action I seek from the minister is that Consumer Affairs Victoria investigate the plight of Wizard Home Loans customers to ensure they have not been unfairly treated as consumers as a result of the exit of GE Money from the Australian home loan market and the sale of Wizard Home Loans by GE Money.

As background, some of my constituents have brought this matter to my attention because they feel traumatised by what has happened to them. Wizard Home Loans was one of the biggest non-bank lenders in Australia. GE Money is the former owner of Wizard Home Loans. The Wizard brand was sold by GE Money to Aussie Home Loans but the loans themselves were not sold.

GE Money has left the Australian home loan market completely, but it failed to pass on the latest interest rate cut from the Reserve Bank of Australia (RBA). It did not want to have anything to do with passing on the rate cut. A minority of the Wizard home loans were on-sold to the Commonwealth Bank, but the management of the rest of the Wizard loans was transferred across to AMS Mortgage Services.

As GE Money and AMS Mortgage Services do not issue new home loans to the Australian market there is no pressure on AMS Mortgage Services to pass on the RBA rate cuts. Borrowers with a GE Money-owned Wizard home loan will have a 12-month deferred administration fee waiver period from 1 March if they choose to refinance through Aussie Home Loans. This is a condition in the sale agreement by which Aussie acquired the GE Money Wizard brand and franchise network on 27 February. I urge the minister to investigate this serious matter and ensure consumers are protected.

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