Short-term lender Moola under investigation over fees

Friday, 2 November 2018

Short-term lender Moola has a range of fees.

The Commerce Commission has launched an investigation into short-term lender Moola.

The lender offers 'fast cash loans'. Borrowers can borrow up to $5000 and get the money within an hour.

They only need to be 18, have internet access, be in employment and have a bank account.

Short-term loans of up to 44 days are charged at an interest rate of 620.5 per cent a year.

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Loans for between 63 and 122 days are lent at 328.5 per cent interest.

Longer-term loans, up to 183 days, are charged interest of 245 per cent.

They also come with a range of fees: A $21.23 establishment fee, a $20 fee for cancelling a direct debit, a $20.08 fee for defaults, a $5.42 fee for debit cards, a $20 fee for lodgements with credit reporting agency Veda and a $29.78 fee for a wage deduction.

A Commerce Commission spokesman said the investigation was primarily into whether it was meeting responsible lending criteria, and whether the fees charged were reasonable.

A review by the Commerce Commission earlier this year found lenders charging up to 803 per cent a year.

It found one in four non-bank lenders could be in breach of consumer borrowing laws.

The Commerce Commission has been taking action against other payday lenders and truck shops. The Government is also introducing tighter sanctions on the sector.

From 2020, lenders breaching the responsible lender principles will face penalties of fines up to $600,000 under the strengthened enforcement provisions in the Credit Contracts and Consumer Finance Act.

Moola has been approached for comment.