Commerce Commission says P2P lender Harmoney pleading guilty to misleading consumers into believing they had been pre-approved for a personal loan

Commerce Commission says P2P lender Harmoney pleading guilty to misleading consumers into believing they had been pre-approved for a personal loan

The Commerce Commission says it has filed charges under the Fair Trading Act against peer-to-peer (P2P) lender Harmoney alleging it misled consumers into believing they had been pre-approved for a personal loan. 

The six Fair Trading Act charges Harmoney faces relate to 27 versions of a pre-approval letter sent to over 500,000 New Zealanders, across a range of demographics, between October 2014 and April 2015. Each letter featured a similar message and the same misleading representations, the consumer watchdog says. 

The Commission alleges that the letters misled recipients by representing that they had been pre-approved to borrow money from Harmoney. The letters stated that in order to find out how much money the recipient had been approved for they needed to visit Harmoney’s website. 

"In fact, recipients of the letter had to go through the normal application process of lodging a loan request and passing the approval process. Only at that point would their loan request be presented to potential lenders via Harmoney’s platform," the Commerce Commission says.

"Harmoney has co-operated with the Commission’s investigation and has indicated that it intends to plead guilty to the charges. As this matter is before the Court the Commission cannot comment further at this time."

The charges have been filed in the Auckland District Court.  

Pre-selected recipients

For its part Harmoney says the recipients of its marketing material were pre-selected through a credit screening process. Nonetheless Harmoney says it acknowledges the information qualifying the offer wasn’t sufficiently prominent so as to be clear there was still a credit process to go through.

"Once Harmoney was made aware of the issue it took immediate action, stopping the campaign completely and ensuring a more robust process in the sign off of marketing campaigns. Harmoney has co-operated fully from first contact with the Commerce Commission," Harmoney says.

Second case still on cards

The Commerce Commission says the Fair Trading Act charges are unrelated to its Credit Contracts and Consumer Finance Act (CCCFA) investigation into Harmoney’s P2P lending transaction. The regulator says it intends to provide an update on this investigation shortly.

This investigation is in relation to whether fees charged by P2P lenders are covered by the fees provisions of the CCCFA. Against the backdrop of this Commerce Commission probe, Harmoney quietly made major changes to fees charged to borrowers late last year

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What were they thinking ? Surely these new-fangled entrants to the market would at least play fair ......... think of Youi, et al .

Oh dear, I think that's the problem, they weren't thinking. Either, they're complete cowboys or their legal oversight was absent or ignored.

credit where credit is due, Harmony is the brighter future ... loan sharking high priced debt to those who cant afford it.

thats a silly comment

You have to laugh at the Harmoney website , they offer loans to borrowers at from 9% and offer interest to lenders of 13.12%

It begs the question as to how anyone makes any money at all from this arrangement which has all the signs of some sharp practice

9.99% is the interest rate offered to borrowers assigned the A1 risk grade and that loan is offered to lenders at the same interest rate of 9.99%. See the interest rates and fees for yourself at
Who's laughing now?

I have looked at the link , and I still don't understand how it can lend at 9% and pay funders at 12%

Boatman, I think my 22% RAR over the 24 months to date is evidence enough to answer your question.

Similarly, 9.5% net return (from 11.71% RAR) over past 12 months. 0.0007% of loan value in arrears. 0 defaults.


My experience is very similar. My net RAR is 9,91% from 228 A grade loans with no defaults and current arrears of 0.0008% of the total amount loaned.
Where I have been disappointed is the manner in which they have made a couple of major changes to the original terms without adequately explaining them. I have made my views known on several occasions. The latest change would cut my RAR significantly to between 8/9% on new loans. Despite this, I want Harmoney and other P2P lenders to succeed in disrupting the personal loan market.

One of my fundamental rules for investing in anything is : -


Sure. I don't think that Harmoney's business model is too difficult to understand.

Several other commentators would be wise to take notice of your comment

IF you are thick it's not Harmony,s fault. The lender lends directly to the borrower, Harmony charges a fee for facilitating this. I get 15.9 rar before tax, investing in lesser risky loans.

What do they mean robust sign off for marketing campaigns, nonsense, the head person signed off on this, and was not like some junior marketing exec making a stuff up...

Harmoney rate their loans according to risk so the loans average out as to the level of risk you take . i think i get about 11% return but i only go for low risk loans .