Harmoney repays $7m in unreasonable fees
37,000 customers overcharged on loans.
Money lender Harmoney is repaying $7m to customers after admitting its loan establishment fee was unreasonable.
About 37,000 customers will be compensated.
The loan establishment fee – called a platform fee – has changed several times since Harmoney began trading. It was initially a percentage fee of up to $1500, and later changed to a fixed fee of up to $500.
Fees were overcharged on loans entered into between 26 August 2014 and 25 August 2021.
Under consumer credit law, any fees charged by lenders must be reasonable.
In a settlement with the Commerce Commission, Harmoney agreed its platform fee was unreasonable and that it would compensate borrowers.
The company has dropped the fee to no more than $165 for new customer loans for the next five years.
The commission is seeking a High Court declaration that Harmoney breached the law by charging unreasonable fees. This case dates back to 2016 when the commission went to the High Court to confirm that Harmoney was subject to the Credit Contracts and Consumer Finance Act.