Napier finance company fined $28,000 for credit law failings
A Napier finance company that specialised in making small loans has been fined $28,000 for "gross negligence" after it failed to comply with consumer lending laws.
Cash to You Loans, which specialised in offering $100 to $3500 loans to clients, has also been banned indefinitely from the consumer finance business.
The company had earlier pleaded guilty to eight charges of breaching the Credit Contracts and Consumer Finance Act 2003 (CCCFA) on various loans it provided between April 1, 2012 and March 31, 2015.
The company failed to properly disclose to borrowers a repayment waiver fee of up to 15 per cent of the loan. It is also alleged to have charged some borrowers unreasonable credit fees, and default interest of 35 per cent when the loan documents provided for no default interest.
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In Napier District Court on Friday, Judge Geoff Rea sentenced the company to $3500 on each of the eight charges it had admitted – a total of $28,000.
He said that, while the company had exhibited "gross negligence", it had not been carrying out "loan sharking" activity.
The Commerce Commission, which prosecuted Cash to You Loans, did not charge its sole director and ultimate shareholder, Noel Nicholls.
It had not found that Nicholls, who ran the business from his home, had acted dishonestly.