Lender issued loans without registration, ComCom trying to reach borrowers

Commerce Commission Deputy Chair Anne Callinan says work is now underway to try and contact affected borrowers who could be entitled to financial compensation, if there are available funds.

“Ms Malupo failed to keep accurate records, and destroyed others, meaning we do not have the details of all affected borrowers,” Ms Callinan says.

“This is why the Commission is taking the step of appealing to the public to get in contact with us if they, or someone they know, borrowed from Ms Malupo.

“While Ms Malupo’s financial position is currently unclear, we do need to hear from affected borrowers as they could be eligible for financial compensation if there are funds available for this purpose.”

One of the charges was brought under the Financial Service Providers (Registration and Dispute Resolution) Act (FSPA), which requires that all consumer lenders must be registered to provide consumer credit. Ms Malupo did not obtain registration despite repeated prompts and guidance from the Commission and continued to lend, knowingly in breach of the FSPA.

As well as being an unregistered lender, Ms Malupo’s terms included interest rates of up to 15 per cent per week.

“This amount would double if borrowers failed to repay their loans within 28 days. Late fees of up to $10 per day would also be charged,” Ms Callinan says.

“This put some borrowers, who were already struggling financially, in an even more difficult position. Some would sell sentimental possessions or miss rent payments to keep up with repayments.”

In some cases, Ms Malupo threatened that borrowers who fell behind on repayments would be publicly exposed on Facebook or other Tongan media sites.