The Commerce Commission has issued a ‘Stop Now’ letter to finance companies Evolution Finance Limited (Evolution Finance) and Budget Loans Limited (Budget Loans) asking them to stop repossessing, or asserting a right to repossess, consumer goods where the applicable loan contract does not provide them with a right to do so.

The Commission says it has evidence that shows Evolution Finance and Budget Loans are likely to have breached ss9 and 13(i) of the Fair Trading Act 1986 (FTA) by claiming they had a right under certain loan contracts to repossess consumer goods not agreed as security in the original loan contract.

The decision to send the companies a ‘Stop Now’ letter comes part way through the Commission’s investigation into Evolution Finance and Budget Loans and is designed to prevent further harm to consumers while that investigation continues.

Background

Evolution Finance Limited and Budget Loans Limited have a parent company, Cynotech Holdings Limited, which is currently in liquidation and was delisted on 13 September 2013 as requested by liquidators.