RMBL class action

Maurice Blackburn, Australia’s leading class action firm, has commenced a class action against RMBL Investments Ltd (RMBL) for alleged breaches of contract and for allegedly engaging in misleading and deceptive conduct in relation to ‘collection charges’ imposed on borrowers.

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RMBL conducts business as a mortgage lender, accepting investments from members of the public and then lending those funds to borrowers under a contributory mortgage fund scheme.

Under the loan agreements between RMBL and borrowers, borrowers are required to pay ‘collection charges’ to RMBL (in addition to their regular interest payments), purportedly to compensate RMBL for its costs, charges and expenses incurred in collecting those interest payments. In the case of the lead applicant in this action, those ‘collection charges’ were originally set at 5.5% of the amount of interest payable each month (or each quarter), but during the course of the loan were increased successively to 27.5%, purportedly in the exercise of RMBL’s discretion. The loan agreement also states that RMBL is not obliged to accept early repayment of the loan prior to the due date.

This class action alleges that, when properly understood, the loan agreement only entitled RMBL to demand, and only required borrowers to pay, the actual amount of costs, charges and expenses incurred by RMBL in collecting interest payments (and not at some pre-determined, arbitrary, rate); or alternatively, that the purported increases to the ‘collection charge’ rate from time to time were void and of no effect. Thus, it is alleged that in imposing the ‘collection charges’ which it did, RMBL acted in breach of contract and has engaged in misleading and deceptive conduct.

Registration

The action has been commenced on behalf of borrowers who have suffered losses as a result of entering into a loan agreement with RMBL containing the 'collection charges' clause and who have paid charges pursuant to that clause at any time.

Register online now or contact the Maurice Blackburn team on 1800 931 361 or RMBLclassaction@mauriceblackburn.com.au if you have any queries.

FAQs - your questions answered

The claim is against RMBL Investments Ltd (RMBL), and has been commenced as a class action in the Federal Court of Australia in Melbourne in the name of a representative party on behalf of class members. The class action will determine the claim of the representative party and the common issues. Current and former borrowers of RMBL who have paid ‘collection charges’ to RMBL may be entitled to seek compensation in the form of repayment of some or all of those charges.

To be eligible to participate in the claim, you need only have paid ‘collection charges’ to RMBL (at any time) – at this stage, the action is not restricted to charges that were paid at a particular time, or during a particular period.

The loan agreements which RMBL entered into with borrowers required borrowers to pay (in addition to their regular interest payments) a ‘collection charge’, which was purportedly to reimburse RMBL its costs, charges and expenses of collecting the interest payments. In the case of the representative party, the ‘collection charges’ were initially set at 5.5% of the amount of the interest payments. However, during the period of the loan, the ‘collection charge’ rate was increased on multiple occasions, ultimately to 27.5% of the amount of the interest payments. This resulted in the representative party paying, throughout the period of the loan, ‘collection charges’ in excess of $200,000 (which, as noted above, were in addition to the regular interest payments).

In the class action, the representative party alleges that: (i) the clause of the loan agreement which authorised RMBL to impose the ‘collection charges’ only allowed it to recover the actual amount of costs, charges and expenses incurred by RMBL in collecting interest payments (and not at some pre-determined, arbitrary, rate); or (ii) alternatively, that the purported increases to the ‘collection charge’ rate from time to time were void and of no effect. Thus, it is alleged that in imposing the ‘collection charges’ which it did, RMBL acted in breach of contract and has engaged in misleading and deceptive conduct, and that the ‘collection charges’ which were paid by the representative party (and by the class members in the class action) were far in excess of what they were legally liable to pay under their respective loan agreements.

Where seven or more people have claims that arise out of similar circumstances (such as, in this case, paying excessive ‘collection charges’ to RMBL), a class action can be brought by one claimant on their own behalf and as a representative of others. The class action process saves time and expense and avoids the need for the courts to determine common issues of fact or law more than once and enables disputes and claims involving large numbers of people to be resolved via a single case.

Class actions are an important part of the legal system and alongside regulatory action ensure corporate accountability. Maurice Blackburn has the leading class actions practice in Australia.

Participating in the RMBL Class Action will not expose you to any out of pocket costs. Unless and until there is a successful outcome, all costs will be borne either by Maurice Blackburn or by the litigation funder, Litigation Lending Services Ltd (LLS). In the event of a successful outcome, any costs payable to either Maurice Blackburn or LLS will be deducted from, and will not exceed, the Claim Proceeds. In other words, it will cost nothing for you to register for, and to remain as a class member in, the class action; if the claim is ultimately unsuccessful, there will be no costs to you, as all costs will be borne either by Maurice Blackburn or by LLS; and if the claim is ultimately successful, any costs will simply be deducted (in an amount approved by the Court) from any compensation to which you’re entitled (and will not exceed that amount).

If the class action is successfully resolved, LLS will receive a return of the costs and expenses it has paid and an additional commission in an amount approved by the Court.

In light of the evidence currently available, Maurice Blackburn considers that a successful outcome in this case is probable. In addition, LLS has chosen to invest significant resources in prosecuting the claim. However, we do not, and cannot, guarantee or predict that a successful outcome is certain – that will depend on whether our view of the relevant clause in the loan agreements is ultimately accepted by the Court.

It is difficult at such an early stage to predict how much you may ultimately recover if the class action is successful. That will depend, firstly, on the amount of ‘collection charges’ which you have paid, and secondly, on the view which the Court takes of the relevant clause in the loan agreements which authorised RMBL to impose ‘collection charges’, and in particular, the level of ‘collection charges’ that it was legally authorised to impose.

As a class member you may opt out of the class action in accordance with a notice that will be sent to you in the course of the action. If you choose to opt out, you will no longer be included in the class action, and will not be entitled to receive any compensation from the class action in the event that it is ultimately successful (but you will be able to pursue separately any rights you may have against RMBL).

We will only use and/or disclose your personal information strictly for the purpose of the class action, or as required by the Court or by law – that may include disclosure to RMBL for the purpose of ascertaining the amount of ‘collection charges’ that you have paid to RMBL. In all other cases, we will seek your consent before disclosing any of your personal information.