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Rapid Loans to refund over $1 million in unreasonable fees

7 March 2017

Internet-based lender Rapid Loans NZ Limited has agreed to compensate borrowers approximately $1.4 million following a Commerce Commission investigation into unreasonable fees.

The Commission’s investigation found Rapid Loans had charged unreasonable establishment, monthly administration or default fees on more than 6000 loans during the period 1 July 2013 to 30 June 2015. Rapid Loans revised its fees after this period.

Under a settlement agreement with the Commission, Rapid Loans will either credit existing loans of affected borrowers or provide cash refunds to those who had already paid their loans off.  The total amount to be paid includes an added 5% to reflect the borrowers’ lost opportunity to use the money.

Commissioner Anna Rawlings said the Rapid Loans investigation was triggered by a complaint from a budget advisor concerned about the high fees being applied.

“Lenders need to make sure that their credit fees are reasonable as required by the Credit Contracts and Consumer Finance Act. Credit fees should only cover costs that are closely related to the particular loan transaction, as was reinforced in the Supreme Court last year,” Ms Rawlings said.

“In this case, the fees were more than Rapid Loans actual reasonable costs in setting up a loan, administering it or in dealing with a borrowers’ default.  We recognise that Rapid Loans did not set out to breach the Act, but its incorrect calculations meant a number of its clients paid more than they should have. It also made it difficult for borrowers to compare the cost of its products with loans from other lenders.  We are pleased to secure an agreement that will see money returned or credited to Rapid Loans’ affected customers.

“This case reflects how much we appreciate the information that we get from consumer organisations. The complaint we received related to only one loan contract but in fact Rapid Loans’ conduct affected a large number of borrowers who would not have been in a position to take their own action.”

Under the settlement agreement, Rapid Loans is required to make its best efforts to contact every affected borrower that it calculates is owed more than $20 in order to refund them and report back to the Commission. Anyone who considers they may be due a refund can also proactively contact Rapid Loans to assist in resolving their individual case.


Rapid Loans NZ Limited is an internet-based lender that commenced business in New Zealand in May 2012, providing unsecured loans of up to $10,000. The company is a sister company to Rapid Loans Pty Limited that lends in Australia. Both companies operate together from the Gold Coast.