Sharechat Logo

High Court backs Commerce Commission over definition of Harmoney platform fees

Monday 21st May 2018

Text too small?

The High Court has sided with the Commerce Commission on how to interpret peer-to-peer lender Harmoney's platform fees, deeming them to be credit fees and falling under the regulator's purview. 

The commission, which oversees the Credit Contracts and Consumer Finance Act 2003, claimed Harmoney's platform fees were an unreasonable credit fee and sought a declaration from the court backing up its interpretation.

Justice Patricia Courtney today backed the commission's interpretation, saying Harmoney's documents amounted to a credit contract and that the way the peer-to-peer lender was structured went "beyond mere matchmaking", providing a nominal creditor to hold loans as a bare trustee for investors and undertaking the full administration of the transactions. 

The judge didn't accept Harmoney's argument that the platform fee was akin to a brokerage fee and shouldn't be captured by the legislation. She also ignored Harmoney's submission that the novelty of peer-to-peer lending should preclude the usual application of the credit contracts law. 

The Commerce Commission lodged the suit in August last year, with the hearing in October. At the time, it said it wanted a declaration that the charge was a credit fee and compensation for affected borrowers. 

The regulator and peer-to-peer lender had previously clashed in 2016, when Harmoney pleaded guilty to misleading consumers over 'pre-approval' letters sent in various forms to more than 500,000 New Zealanders between October 2014 and April 2015. The letters misled recipients by telling them they had been pre-approved to borrow money from Harmoney. The peer-to-peer lender was ultimately fined about $293,000 over that breach.

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Richard Yan appeals $36 million Mainzeal liability
Summerset secures land for new villages in Rangiora, Blenheim
A2 names China CEO
Ike signals 5% FY revenue growth, missed ebitda target
NZD stalled ahead of RBNZ statement; global outlook weakens
25th March 2019 Morning Report
NZD headed for 0.6% weekly gain against greenback
PREVIEW: RBNZ tipped to keep cash rate at 1.75%, reiterate next move could be up or down
Sky TV hires Deloitte partner as fill-in CFO
Vector fined $3.6 mln in industry first

IRG See IRG research reports