The lender Harmoney has been fined $292,500 in the Auckland District Court for misleading consumers into believing they had been pre-approved for a personal loan.

The Commerce Commission filed six charges against the peer-to-peer lender relating to a pre-approval letter sent to more than 500,000 people nationwide between October 2014 and April 2015.

Recipients were invited to visit Harmoney’s website to find out how much money they had been approved to borrow, when in reality they would need to go through the normal process of filing a loan application and passing the approval process.

The Commissioner, Anna Rawlings, says businesses need to be careful about representations included in marketing materials to ensure consumers are not being misled.

“Harmoney’s marketing campaign was personalised to individual consumers and gave the direct impression they had been pre-approved for a personal loan. Our concern with this practice was that it relied on misrepresentations to draw consumers into a sales process, giving Harmoney an advantage in the market it would not have otherwise have had,” Ms Rawlings said.

“It also had the potential to harm consumers who responded to the letter. Believing that they were guaranteed a loan, they may have been encouraged to sign up with Harmoney without first checking whether the terms offered were the best available to them in the market.”

Peer-to-peer lending is the practice of borrowing money to individuals or businesses through online services that match lenders directly with borrowers.