$76,000 fine for Twenty Fifty Club and indefinite ban for director
Twenty Fifty Club Ltd and its sole director Gavin Marsich have been fined a total of $76,000 and Mr Marsich has been banned indefinitely from carrying out any further consumer lending.
Judge Moses in Manukau District Court has also ordered Mr Marsich to pay $4,400 in compensation to one borrower.
The sentence follows the company and Mr Marsich being found guilty in June 2016 of committing offences under the Credit Contracts and Consumer Finance Act 2003, the Fair Trading Act 1986, and the Commerce Act 1986.
The company and Mr Marsich were each convicted of 16 charges including: charging unreasonable credit and default fees; failing to disclose loan information to borrowers, falsely claiming to be a registered financial services provider and a member of a dispute resolution scheme, and failing to supply information required by the Commerce Commission for its investigation.
Judge Moses also made orders preventing Twenty Fifty from enforcing its "marketing fee", "marketing koha" or default fees on any existing loans.
The Commerce Commission says Twenty Five Club did not charge any interest.
"It charged a fee of 50% of the loan amount as a “marketing fee” or “marketing koha”. The fee and the loan amount were due on the borrowers next pay day or within 7 days. If the borrower did not pay, Twenty Fifty would roll-over the loan and charge another fee of 50% of the outstanding balance. These fees affected at least 82 debtors, over some 234 loans.
Commissioner Anna Rawlings says Mr Marsich’s offending was serious as Twenty Fifty Club’s failure to comply with consumer protection laws caused significant harm to borrowers.
“Twenty Fifty Club provided credit to vulnerable consumers who often required urgent loans and generally could not get credit elsewhere. Its customers were not given the important information they needed about their loans such as their right to cancel their contract or the consequences of not meeting their loan obligations," she says.
“The way in which the fees were charged made it almost impossible for consumers to compare Twenty Fifty Club's loans with other loans."
Last updated on the 28th November 2016