Victims in short supply for finance co’s offending

June 23, 2017 | By More

Acute Finance Ltd has been fined for overcharging its consumer finance customers, but the Commerce Commission has not been able to find any victims who want to speak out.

The Christchurch District Court sentencing, at which the company was fined $22,000, went ahead without any victim impact statements before the court.

“No-one feels victimised by this,” Commerce Commission prosecutor, Sam Lowery acknowledged before Judge Tom Gilbert at the sentencing for four representative breaches of the Consumer Finance Act.

Defence counsel Phil Shamy said it was “an issue of inadvertence – they just didn’t turn their mind to it”. But there was a sense of loyalty among the customers. “They don’t think they have suffered any harm.”

The charges arose because of a hidden charge in the contracts, for the repayment waiver fee which covered customers if they died, became disabled, or were made redundant. Acute Finance charged for the cover, which cost only about a third of that amount. That generated a profit which was prohibited by the Act.

The company pleaded guilty on the day before a scheduled trial, to the charges of having an unreasonable credit fee or default fee in its consumer credit contract.

The Commerce Commission examined a sample of 67 contracts from 2014 and found there was overcharging of an average of $149 per contract – a total of about $10,000 for the year.

Mr Shamy said the company had repaid those fees and was considering whether it had the data available to refund others.

Judge Tom Gilbert said: “It is a matter for their corporate and individual consciences.” He regarded it as careless offending, in a highly regulated industry.

Mr Lowery said the commission accepted it was not deliberate offending. The company had not taken legal advice about the practice and it had gone on for years.

Judge Gilbert said the company dealt with loans ranging from $300 to $5000 for terms of up to three years. Its customers were mostly low income individuals. He said it was submitted that the company were “reasonable lenders and don’t fall into the category that some might describe as ‘loan sharks’.”

He noted that they had co-operated with the Commerce Commission investigation, had no previous convictions, and refunds had been paid on the 67 loans referred to in the charges.

He said he had read testimonials describing the sole director and only employee, Suzanne Harper, as “a decent person”.

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