The Commerce Commission is taking legal action against money lender 'Pretty Penny', claiming it acted irresponsibly by dishing out "oppressive" loan agreements.
Newshub has learned the company director is a former Super Rugby halfback who is also linked to lending businesses in Australia - which are also under scrutiny.
- Pretty Penny Loans under investigation for high-interest rates and lending behaviour
- Pretty Penny going to court over alleged irresponsible lending
- Prosecuting predatory lenders takes too long - expert
The Commerce Commission is taking the cash loan company of former Canterbury player, Mark Swanepoel, to the High Court. Allegations against Pretty penny include:
- Failure to ensure loan agreements were not oppressive
- Failure to ensure borrowers could make repayments
- Failure to exercise care in the way it advertised.
Swanepoel is also the sole director of Queensland money lender, Cigno, which has received backlash for charging interest rates as high as 990 percent.
Swanepoel's registered address for the company that runs Pretty Penny is in the Auckland suburb of Newmarket - but none of the other building occupants recognised the company name. All requests for comment have gone unanswered.
Sarah Newham borrowed $400 from Pretty Penny to help buy her children birthday presents but ended up paying back almost double.
"It's crazy, ridiculous that they can get away with it and leave everyone else out of pocket," Newham told Newshub.
She says there should be an interest rate cap and stricter lending criteria.
However, budgeting experts say even if the Commerce Commission wins, the current rules mean the court can't even hand down a fine.
"For them to under the current laws, escape from even having to pay a fine in recognition of the harm they've caused, is pretty outrageous," says Fincap chief executive Tim Barnett.
The Government is considering law changes, which may include the introduction of penalties.
Newshub.
