Pretty Penny going to court over alleged irresponsible lending

Pretty Penny is being taken to court by the Commerce Commission over alleged irresponsible lending.
Photo credit: Getty

Pretty Penny is being taken to court by the Commerce Commission, which alleges the short-term loan company failed to exercise the level of care, diligence and skill required of a responsible lender.

The commision claimed on Monday that Quadsaa Pty Ltd, which trades as Pretty Penny/PPL, breached the Credit Contracts and Consumer Finance Act (CCCFA).

Pretty Penny provides short-term cash advances of up to $1000.

During the period September 2016 - June 2017, the lender is said to have applied an  interest rate of 1 percent per day - 365 percent over a year - on short-term cash loans provided to customers on amounts between $50 and $550, for up to 92 days.

The commission has commenced High Court proceedings around the company's alleged failure to make satisfactory enquiries around borrowers' requirements over the 2016-2017 period, including their ability to repay the loan.  

There are concerns about the lack of care given to customers entering loan agreements and that the company failed to ensure they were reasonable and could be made without suffering substantial hardship.

The commission is seeking declarations that the conduct of Pretty Penny breached the CCCFA and injunctions preventing Pretty Penny from lending, without taking specified steps to ensure that legal obligations are met.

Compensation will also be sought for affected borrowers.

The commission says it received 76 complaints or enquiries about Pretty Penny since March 2017.

Newshub.

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