Unregistered lender gets two-year ban after targeting vulnerable borrowers

During sentencing at Auckland District Court, Ms Malupo was ordered to pay $15,000 in reparations to seven borrowers and was ordered to complete 150 hours of community service.

This was a reduction from a starting point of approximately $50,000 in combined reparations and fines alongside the two-year banning order. Judge Sharp noted the reduction recognised the requirement of the Court to balance the need for a penalty against Ms Malupo’s lack of financial means to be able to pay.

Under the Financial Service Providers (Registration and Dispute Resolution) Act and the Credit Contracts and Consumer Finance Act (CCCFA), all lenders must be registered and certified 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.

Commerce Commission Head of Credit Investigations and Compliance Simon Anderson says the Commission will hold unregistered lenders to account and ensure they operate within the law.

“Those who do not can expect to be on the receiving end of enforcement action,” Mr Anderson says.

“On several occasions, we advised Ms Malupo of the legal requirement to become registered. Not only did she ignore this, she targeted people who could least afford the loans she was offering.”

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

The amount would double if borrowers failed to repay loans within 28 days, with late fees of up to $10 per day also charged.

“The distressing element of this case was that many of Ms Malupo’s customers were already struggling financially when they came into contact with her,” Mr Anderson says.

“After taking out a loan, some would sell meaningful personal items or miss other essential payments, such as rent, 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.

In sentencing Ms Malupo, Judge Sharp acknowledged the victim impact statements provided by affected borrowers and said that they illustrated the emotional and financial impacts the borrowers had faced.

“There are persons who have suffered as a consequence of paying fees and interest that they shouldn’t have had to pay,” he said.

Background

The Commission first launched an investigation into Ilaisaane Malupo after receiving complaints, including from a financial mentor, about Ms Malupo’s lending practices, which were causing harm to borrowers.

In June 2025, Ms Malupo was charged with:

• Criminal charges under section 11 of the Financial Service Providers (Registration and Dispute Resolution) Act 2008 for providing a financial service without being registered, the penalty of which is 12 months’ imprisonment or a fine not exceeding $100,000; and
• Criminal charges under section 103(2) of the Commerce Act 1986 for attempting to deceive or knowingly mislead the Commission on any matter before it, the penalty of which is a fine not exceeding $100,000.

All lenders must be certified under Part 5A of the Credit Contracts and Consumer Finance Act 2003 by the Commerce Commission.

To gain certification, lenders must satisfy the Commission that those operating the business are financially sound, honest, reputable, reliable and competent to do the job.