Pretty Penny leaves New Zealand, cancels loans under Trade Commission settlement
Alexander Robertson / RNZ
The Trade Commission has reached an agreement with the short-term lender Pretty Penny.
Pretty Penny payday lender has left New Zealand after making a deal with the Trade Commission.
Quadsaa Pty Limited (trading as Pretty Penny and PPL) will write off all outstanding loan balances as part of a settlement agreement with the commission.
The commission took the Australia-based company in court in 2019 for breach of the principles of lender liability of the Law on Credit Agreements and Consumer Finance (CCCFA).
The charges related to Pretty Penny’s conduct between September 2016 and June 2017.
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Pretty Penny has also signed a binding agreement that it will no longer advertise, invite or take out consumer loans in New Zealand, and will not provide any borrower information to third parties unless the law requires it.
In addition to canceling all outstanding loan balances at the time of her delisting from the company register, Pretty Penny will reimburse the full cost of the loan to 21 borrowers named in the commission’s statement against her, filed with the High Auckland Court in August 2019.
Commission President Anna Rawlings has said Pretty Penny will no longer be able to do business in New Zealand.
“This agreement means that the unpaid balances owed to Pretty Penny should no longer be payable,” she said.
In exchange for ceasing operations in New Zealand and wiping out debt from existing customers, the commission agreed to end its lawsuits against Pretty Penny.
Proceedings filed with the court alleged that between February 2017 and June 2019, Pretty Penny offered loans ranging from $ 50 to $ 550 for terms of between 1 and 92 days with an annual interest rate of 365 percent, or 1 percent per day with interest compounded daily.
The commission alleged that Pretty Penny failed to exercise the care, diligence and skill of a responsible lender as required by Lender Liability Principles, including failing to ensure that that his loan agreements are not oppressive.
“Recent changes to the consumer credit law capped the interest and fees charged on a high-cost loan at 100% of the amount originally advanced, and provided additional protections for borrowers. The commission has provided advice to lenders on the changes and we are actively monitoring their compliance, ”said Rawlings.
This is not the first time that Pretty Penny has come under fire for its lending practices.
In 2016, Mediaworks has removed the company’s advertisements of its radio stations after public pressure.
Since 2015, lenders were required to adhere to the principles of lender liability set out in the CCCFA.
This meant that lenders had to make sure that the loans they offered were suitable for the borrower’s needs and that they could repay them, that the borrower made an informed decision, and that the loan was made ethically.
In June 2018, the commission launched a review of the lenders website, which reviewed the websites of 215 lenders to determine whether they were likely to fulfill their responsibilities under the CCCFA.
It showed annual interest rates of up to 803 percent and over 500 different named charges.
The law amending the Law on Credit Agreements, which was enacted in December, has tightened up the requirements for responsible lending, especially with regard to how affordability and suitability tests were conducted.
The new law also limited the accumulation of interest and fees on high-cost loans and provided for new remedies and penalties for non-compliance.