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ComCom charges Allan Hawkins' finance companies over debt recovery

Wednesday 17th December 2014

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The Commerce Commission has filed criminal proceedings against two finance companies run by former 1980s high flyer Allan Hawkins over their debt recovery practices.

The regulator today filed papers in the Auckland District Court against Budget Loans and Evolution Finance, claiming the lenders breached the Fair Trading Act, it said in a statement. The commission said the finance companies misled debtors by repossessing or threatening to repossess property when they didn't have the right to do so, adding interest and costs to loans after property had been repossessed, telling debtors they had to make loan payments at a higher rate than that set by the court and telling them they had a shorter time to remedy a loan default before their goods would be repossessed.

The finance companies were issued with a 'stop now' notice by the regulator in November last year while it conducted its investigation, and in 2010 Budget Loans admitted 34 charges of breaching the Fair Trading Act by charging interest and fees after it had repossessed and sold items of security. The lender agreement to make substantial repayments and was fined $30,750.

"Ultimately it is now for the court to decide whether the evidence shows that Budget Loans' and Evolutions Finance's conduct was illegal," general counsel Mary-Anne Borrowdale said. "However, all finance companies should be aware that we are paying close attention to their conduct and won't hesitate to act if we believe they are misleading debtors about their rights and obligations."

The loans largely originated from a number of failed finance companies including National Finance, Western Bay Finance and Equality Finance, which Budget Loans and Evolution Finance purchased when they were subsidiaries of former NZAX listed company Cynotech Holdings.

Hawkins, the former head of Equiticorp who was jailed in the 1990s for his role in the so called H-fee scheme, took control of Cynotech in 2010, and pulled his financial support last year, leading to the company's liquidation and delisting.

He and Wayne Hawkins are directors of the two finance companies facing charges.

 

 

 

 

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