Third line forcing fine by ASIC

The Australian Securities and Investments Commission raised no real objection to the proposed steering of customers of Wizard Home Loans to Aussie Home Loans under a controversial agreement in the deal by the latter to buy the former.

Under the plan, Wizard will waive break fees on home loans when customers refinance through Aussie (as mortgage broker or direct funder). Different waivers apply to other customers of Wizard.

GE Capital, the owner of Wizard, in late February provided a notice to the Australian Competition and Consumer Commission of the arrangements for the waiver and the ACCC is seeking views from the market on the plan.

Greg Kirk, the ASIC senior executive leader for deposit takers, credit and insurance advised ASIC was "overall supportive of the proposed arrangement".

Kirk wrote that ASIC suggested that the ACCC require that GE Capital make clear to customers that switching fees, as opposed to break fees, may still apply and that the promotion of the waiver of break fees is irrelevant when break fees don't apply anyway, such as when loans have been in place for five years.

Submissions to the ACCC over the Wizard and Aussie arrangement are due by Monday.