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Pre-approval letters land Harmoney in court

The Commerce Commission is taking peer-to-peer lender Harmoney to court, alleging the company’s marketing campaign misled consumers and breached the Fair Trading Act.

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Harmoney faces six charges under the Act relating to letters it sent to 500,000 consumers telling them they’d been pre-approved for a loan.

The commission says the letters, sent out between October 2014 and April 2015, told recipients they had to visit Harmoney’s website to find out how much money they had pre-approval to borrow. There were 27 versions of the letter.

But once on the website, letter recipients found they had to go through the normal process of applying for a loan, including passing the approval process.

The commission says Harmoney has co-operated with the investigation and indicated it would plead guilty to the charges.

See our article on Harmoney’s use of Credit Sense, a bank statement retrieval service that requires customers give it power of attorney to access their accounts.

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