Finance companies Budget Loans Limited and Evolution Finance Limited have been found guilty in the Auckland District Court on 106 charges brought by the Commerce Commission under the Fair Trading Act 1986 (FT Act).

The companies were found guilty of representations made to 18 borrowers while enforcing loan contracts.

The Commission filed proceedings against the companies in December 2014 alleging they misled consumers about their rights by:

  • repossessing or threatening to repossess borrower’s property when they did not have a right to repossess
  • adding interest and costs to loan balances after borrower’s property had been repossessed and sold, when that is unlawful
  • telling debtors they had to make loan payments at a higher rate than had been set by the Court
  • telling debtors that they had a shorter time to remedy a loan default before their goods were repossessed than they were allowed under law.

Commission Chair Dr Mark Berry said the guilty finding was important in sending a clear message to lenders about what they can and cannot do when seeking to repossess borrowers’ property.

“Borrowers often do not understand their rights under the law and that makes it difficult for them to hold lenders to account. In this case it was budget advisors and community lawyers in Auckland that alerted us to the behaviour, enabling us to investigate and prosecute Budget Loans and Evolution Finance,” Dr Berry said.

“The guilty verdict is pleasing and the public can be assured that tackling unlawful repossession activities remains a priority for us in our work enforcing credit and consumer laws. We are committed to ensuring that lenders and other parties comply with credit contract laws throughout the full life of a loan – including when the borrower has fallen into default.”

In total, the Commission filed 125 charges against Budget Loans and Evolution Finance. At a hearing in May 2016 the defendants sought to have 122 of those charges dismissed.

The Court ruled this month that 19 charges should be dismissed due to a lack of certainty about the circumstances in which a lender could continue to charge interest and costs after repossessing and selling consumer goods under a continuing security agreement.

The Commission intends to seek permission to appeal the Court’s ruling on this issue and will seek to have these 19 charges reinstated.

As this matter remains before the Court the Commission cannot comment further at this time.

The Court’s judgments on this case to date will be available shortly on the Enforcement Response Register.


The directors of Budget Loans Limited and Evolution Finance Limited are Allan Hawkins and Wayne Hawkins. Evolution Finance and Budget Loans purchased old loan books from a number of failed finance companies including National Finance Limited and Western Bay Finance Limited. The majority of loans originate between 2001 and 2006.

This is the second time the Commission has prosecuted Budget Loans. In July 2010 it admitted 34 charges of breaching the FT Act by charging interest and fees after it had repossessed and sold items of security on National Finance loans. It agreed to make substantial repayments and was fined $30,750 in the Auckland District Court. See the media release.

The Commission started the current investigation into Budget Loans and Evolution Finance in 2012. The Commission issued a “Stop Now” letter to the two companies in November 2013 with regard to one aspect of their conduct while its investigation continued. See the media release. The charges prosecuted in this case include the conduct outlined in the “Stop Now” letter, as well as further conduct the Commission investigated.