Investigation results in refunds for Moola customers.
High cost lender Moola.co.nz is required to pay back customers about $2.8 million after a Commerce Commission investigation found the company charged unreasonable fees.
Moola offers loans to consumers via its website. Before law changes in June 2020 to cap interest rates on high cost loans, it advertised rates as high as 620.5 percent per year.
In September 2017, the District Court raised concerns about Moola’s fees and asked the commission to intervene in debt recovery proceedings taken by Moola.
As a result of its investigation, the commission considers that between February 2016 and July 2017 Moola charged unreasonable credit and default fees, breaching the Credit Contracts and Consumer Finance Act (CCCFA).
During the period, Moola charged:
As part of a settlement agreement, Moola must credit or refund affected customers with the difference between the fee it charged and the fee the commission calculated was reasonable.
Commerce Commission Chair Anna Rawlings said affected customers will be credited or refunded by Moola within the next 12 months.
Moola has also agreed to prominently publish information about the settlement agreement on its website. The company is required to confirm it has complied with the agreement by providing a final report prepared by an independent accountant approved by the commission.
Last year, the commission filed High Court proceedings against Moola alleging its lending practices were irresponsible. The case is ongoing.