A Whanganui money lending company will return more than $400,000 to current and former borrowers following a settlement agreement with the Commerce Commission.
The company Finance Ezi Limited, which had been trading as Ezi Finance, failed to meet its legal obligations, the Commerce Commission said in a statement today.
Ezi Finance offers personal loans up to $5000 to consumers.
In November 2016 the Commission reviewed its disclosure statement for compliance with the requirements of the Credit Contracts and Consumer Finance Act (CCCFA) as part of a review, and found in the commission's view: "Ezi Finance did not meet its legal obligations under the CCCFA because key information required by the Act was left out of its initial loan documents."
Ezi Finance acknowledged the initial disclosure did not comply with the CCCFA, Commission Chairwoman Anna Rawlings said, adding the company had since updated its documents, given affected borrowers the right information and has agreed to make payments and/or adjustments to their loan balances.
Between June 2015 and February 2017, Ezi Finance entered into almost 1500 (1464) consumer credit contracts with more than 650 (654) different borrowers which failed to include an accurate statement of the borrower’s cancellation rights, a statement of the borrower’s right to apply for a variation to their loan if they suffer unforeseen hardship and Ezi Finance’s registration details from the Financial Service Providers Register.
"It is important for borrowers to receive the key information required by the Act when they enter into loans, including information about their rights under their loan contracts," Ms Rawlings said.
"This settlement reflects the fact that, under the CCCFA, failing to provide this information carries serious financial consequences for lenders. Ezi Finance has agreed to repay some of the interest and costs it charged to affected borrowers."