Peer-to-peer lender Harmoney has today been fined $292,500 in the Auckland District Court for misleading consumers into believing they had been pre-approved for a personal loan.

The Commerce Commission filed six charges against Harmoney under the Fair Trading relating 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. Recipients of the letter were invited to visit Harmoney’s website to find out how much money they had been approved to borrow, when in reality they would need to go through the normal process of filing a loan application and passing the approval process.

Commissioner Anna Rawlings said businesses need to be careful about representations included in marketing materials to ensure consumers are not being misled in any way.

“Harmoney’s marketing campaign was personalised to individual consumers and gave the direct impression they had been pre-approved for a personal loan. Our concern with this practice was that it relied on misrepresentations to draw consumers into a sales process, giving Harmoney an advantage in the market it would not have otherwise have had,” Ms Rawlings said.

“It also had the potential to harm consumers who responded to the letter. Believing that they were guaranteed a loan, they may have been encouraged to sign up with Harmoney without first checking whether the terms offered were the best available to them in the market.”