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ComCom vs Harmoney: Peer-to-peer lender under fire over fees

The Commerce Commission is officially at war with peer-to-peer lender Harmoney, filing civil proceedings in the Auckland High Court over the the fees it charges borrowers.

Since its incorporation in May 2014, Harmoney has charged borrowers a ‘platform fee’ that is added to all loans funded through its platform. Before December 2015 Harmoney set the fee at a percentage of the amount borrowed.

The Commission’s view is that the platform fee is a credit fee under the Act, and that Harmoney is a creditor. Harmoney says it is not a creditor, and that the fee is the revenue it earns for running its loans marketplace.

If the Court finds that the platform fee is a credit fee, the CCCFA requires the fee to be reasonable and only cover the lender’s transaction-specific costs, the Commerce Commission says.

The Commission says it is asking the Court a number of legal questions and it expects that the answers will provide more clarity about how consumer credit laws apply to loans offered by Harmoney and other peer-to-peer lenders.

According to a report on, Harmoney chairman David Flack says he was committed to ensuring Harmoney, New Zealand's first licensed peer-to-peer platform, complied with all laws and regulations.

"It is disappointing that the Commerce Commission is seeking to clarify the legal position - as it affects the entire peer-to-peer industry - by bringing this case stated action by using Harmoney's operating model as the basis for the judicial review,” he says.

The news today follows earlier action this month taken by the Commerce Commission against Harmoney, where the commission accused the peer-to-peer lender of misleading consumers under the Fair Trading Act.

Harmoney faces six charges relating to a pre-approval letter sent in various forms to more than 500,000 New Zealanders between October 2014 and April 2015, which misled recipients by telling them they had been pre-approved to borrow money from Harmoney.

The Commission alleges that the letters misled recipients by representing that they had been pre-approved to borrow money from Harmoney.

The letters stated that in order to find out how much money the recipient had been approved for they needed to visit Harmoney’s website.

However, recipients of the letter had to go through the normal application process of lodging a loan request and passing the approval process. Only at that point would their loan request be presented to potential lenders via Harmoney’s platform.

At the time, Harmoney said it indicated it intends to plead guilty to the charges. The matter is now before the courts.