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Harmoney fined for pre-approval marketing

NZ NewswireNZ Newswire 1 day ago

Misleading consumers into believing they had pre-approval for a personal loan in marketing has cost peer-to-peer lender Harmoney $292,500.

The fine was handed down in the Auckland District Court after the Commerce Commission filed six charges against Harmoney under fair trading law.

There were 27 versions of a pre-approval letter sent to more than 500,000 New Zealanders between October 2014 and April 2015.

Recipients of the letter were invited to visit Harmoney's website to find out how much money they had been approved to borrow, when in reality they would need to go through the normal process of filing a loan application and pass the approval process.

Commissioner Anna Rawlings said businesses needed to be careful about representations in marketing materials to ensure consumers were not being misled.

The campaign gave the direct impression to individuals that they had been pre-approved for a personal loan.

The marketing ploy gave the company an advantage in the market it would not have otherwise have had and had the potential to harm consumers.

Believing that they were guaranteed a loan, consumers may have been encouraged to sign up with Harmoney without first checking whether the terms offered were the best available to them in the market, Ms Rawlings said.

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