Undisclosed variation fees

Eileen borrowed money from a credit union. From time to time she needed to change the day the payments were due to be deducted from her bank account. The credit union made the changes, but charged a $10 variation fee. When Eileen looked at her loan agreement, she could not see the $10 fee had been disclosed. Eileen also checked the credit union’s website, and it stated that there would be no fees charged for loan variations.

Eileen asked the credit union to refund all the loan variation fees it had ever charged. The credit union refunded three loan variation fees. Eileen said that she thought she had been charged loan variation fees on other occasions and asked the credit union for her bank statements.

The credit union gave Eileen some bank statements, but not all the bank statements, so Eileen complained to FSCL.



Eileen felt the credit union was ‘cherry picking’ the bank statements and sending only the statements that did not have any variation fees. The credit union disagreed, saying it had refunded all the variation fees and that it was time consuming to go through its archives looking for statements. The credit union also referred to emails sent to Eileen at the time saying that a variation fee had been charged.



We told the credit union that if it had not disclosed the loan variation fee it was obliged to refund all the fees charged. Eileen found emails relating to other loan variations for which the credit union had not provided statements.

We explained to the credit union that in order to evaluate Eileen’s complaint we would need to see all the statements, regardless of how time consuming it was for the credit union to locate those statements.



After some encouragement the credit union eventually provided all the statements, and we were able to see that there was only one other occasion on which a loan variation had incurred a $10 fee. Fortunately, the settlement previously paid was $10 more than the variation fees charged, so we advised Eileen that we did not think the credit union needed to pay any more money.


Insights for participants

If you intend charging a fee for a service, the fee must be disclosed in your documentation.