Linsa Finance settles for $350k
The Commerce Commission has signed a settlement agreement a finance company has discontinued high-court proceedings.
Linsa Finance has agreed to return $350,000 to about 900 current and ex-borrowers for failing to disclose what the regulator believes is key information required under the Credit Contracts and Consumer Finance Act (CCCFA).
The company has offices in Manurewa, South Auckland, and Tauranga offering secured and unsecured personal loans of up to about $4,000.
It accepts that between June 6, 2015, and March 29, 2016, 1,721 of its loan contracts failed to include:
- Accurate statements of borrowers’ cancellation rights.
- Any statement of consumers’ rights to apply for relief on grounds of unforeseen hardship and how to do so.
- The frequency with which continuing disclosure statements would be made.
- The name and contact details of Linsa’s dispute resolution scheme.
- Linsa’s registration details on the Financial Services Providers Register.
The commission became aware of these omissions when it undertook a review of third-tier lenders’ contracts in early 2016.
“Consumer credit law requires lenders to provide borrowers with important information that helps them to understand their rights and obligations under their loan,” says commission chairwoman Anna Rawlings, pictured.
“The information includes what to do if they experience difficulty in meeting their repayment obligations or end up in a dispute with the lender. Linsa failed to provide some of this information to its borrowers. After learning of the commission’s concerns, Linsa corrected its disclosure and provided corrective disclosure to affected borrowers. It has also agreed to make payments to affected borrowers.
“The commission has resolved a number of cases involving similar breaches of these important consumer credit protections. All lenders need to take proper steps to ensure that they are meeting the disclosure obligations which are very clearly described in the CCCFA.”