Geneva refunds $500,000 after Commission settlement

Jonathan Underhill

Thursday 19th June 2008

Geneva Finance, the lender that closed its branch network to cut costs and restore the confidence of debenture holders, agreed to make NZ$500,000 of refunds after a settlement with the Commerce Commission.

Geneva made the refunds to 3,700 customers in an out-of-court settlement with the regulator, after admitting it breached credit contracts law by not providing rebates on payment protection insurance premiums for loans repaid early.

The company "has been cooperative and started providing rebates to the affected customers as soon as the issue was identified," Commission chairman Paula Rebstock said in a statement today.

It was the second out-of-court settlement between Geneva and the commission, according to the statement. Last year, it refunded about NZ$589,000 in overcharged fees and interest to 900 debtors.

Geneva posted a NZ$7.9 million loss in the 12 months ended March 31, reflecting the network closure, restructuring costs associated with its moratorium and charges to adopt IFRS accounting.

The company plans to issue shares at no cost to new shareholders to make up the difference between its net asset backing as at May 1 of 34.7 cents a share and its forecast of 36.5 cents.

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