El Cheapo Cars fined, ordered to repay $340k for loan disclosure breaches
El Cheapo Cars was also fined $115,000 after pleading guilty to seven charges brought by the Commerce Commission under the Credit Contracts and Consumer Finance Act (CCCFA).
An investigation by the Commission found last year that borrowers were not provided key information when changes were made to existing loans between 2015 and 2021.
"Customers would often increase their loan amount with El Cheapo to cover other costs that had come up, like buying new tyres, and El Cheapo did not give its customers disclosure of the changed terms," said acting general manager of credit Sarah Bartlett last year.
Disclosure should have included information on the repayment amounts, interest owed and loan period, which had increased in most cases.
ADVERTISEMENT
In his sentencing notes at the Porirua District Court today, Judge Noel Sainsbury said disclosure obligations, particularly those about consumer rights and obligations, were "among the most fundamental protections" under the CCCFA.
"The importance of lenders adhering to disclosure requirements is undeniable."
The protection of vulnerable consumer groups was a "core priority" for the Commerce Commission, said general manager for competition, fair trading and credit, Vanessa Horne.
"We are particularly focussed on motor vehicle lenders who are providing credit to vulnerable consumers."
Horne said for many Kiwis, the purchase of a car was one of the biggest financial commitments they would make.
"The CCCFA is there to protect consumers when they borrow money or buy goods on credit, and under the CCCFA, consumers have a right to be provided upfront information about any changes to their loan."
She said sentencing was a "win for consumers and borrowers affected by El Cheapo's failures".
ADVERTISEMENT
"This case should send a strong signal to motor vehicle financiers that non-compliance with disclosure obligations will not be tolerated."
Borrowers who had a loan with El Cheapo Cars which was varied between 2015 and 2021 may be eligible for compensation.
The Commission would be reaching out to affected parties shortly, it said.
"The Commission has also filed civil proceedings against Go Car Finance and Second Chance Finance in the High Court, with allegations that both lenders also breached the CCCFA when providing car finance to borrowers."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
RNZ News
20 minutes ago
- RNZ News
Serious crash closes State Highway Two into Welllington
Police were callled to the scene about 8.30pm Thursday. Photo: RNZ/ Marika Khabazi Motorists heading to Wellington from Lower Hutt face a lengthy detour, after a two-vehicle crash. Police say there are serious injuries, after the accident in the southbound lanes of State Highway Two, just north of the Ngauranga interchange. The highway southbound is closed from the Dowse Drive interchange and Petone. Northbound lanes are open. Motorists will have to take State Highway 58, the Haywards Hill and State Highway One, until the road is re-opened. More to come Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
NZ Herald
3 hours ago
- NZ Herald
Trial of New Zealand soldier accused of espionage remains shrouded in secrecy
By Jimmy Ellingham of RNZ A soldier with links to far-right groups and who is accused of spying will face a court martial hearing next week – a first-of-its-kind prosecution shrouded in secrecy for now. The Linton-based soldier's name is suppressed and so is the foreign
Otago Daily Times
3 hours ago
- Otago Daily Times
Espionage trial of NZ soldier shrouded in secrecy
By Jimmy Ellingham of RNZ A soldier with links to far-right groups and who is accused of spying will face a court martial hearing next week - a first-of-its-kind prosecution shrouded in secrecy for now. The Linton-based soldier's name is suppressed and so is the foreign country at the centre of the espionage case, as well as the names of some prosecution expert witnesses. RNZ is opposing these orders and a suppression hearing is scheduled for Monday morning, before the court martial begins. In late 2020, 17 charges under the Armed Forces Discipline Act were laid against the soldier, including espionage and possessing objectionable material. Since then, the case has wended its way through pre-trial hearings. RNZ has previously reported the soldier, aged 27 at the time of his arrest, was a member of far-right groups the Dominion Movement and Action Zealandia. First of its kind A similar case 50 years ago saw Bill Sutch tried and acquitted in the civilian court of espionage, for passing information to the Russians. Next week's court martial is the first military case. "I think 'unusual' is not the right term," said retired Auckland University law professor Bill Hodge about the prosecution. "I think 'unique' might be the correct term." Hodge said the suppression orders appeared extensive. "I've always been surprised that there could be information held by the armed forces, which absolutely had to be kept top secret. "There maybe information about the citizens of a foreign jurisdiction and what they're doing here, but still, that would be of public interest." Hodge said military courts were historically ahead of civilian ones on matters of justice and fairness, although they might hold concerns about making information public. "Remember, the background of a military court would concern hostilities and [be] in the face of the enemy. In that sort of situation, that sort of context, they would be greatly concerned with information that would aid the enemy. "I don't see an enemy at this moment, so I'm still mystified at what secrecy they'll be pursuing." Military panel to hear the case One difference between courts martial and civilian courts is that, instead of a jury, a panel of senior military officers hears the evidence, and decides on a defendant's guilt or innocence, and - if applicable - their sentence. In his previous career in the military, Hodge sat on these panels. "A military court is concerned with fairness, right to counsel, the insanity defence, for example, the discovery of information," he said. "One thing I could say firmly is the individual will have a fair trial, because in my experience, it's a fair system." David Pawson is an experienced court martial counsel and, in 30 years - firstly with the military police, then as a lawyer - he has never seen a similar case. "When I was a military police special investigator - that was at the end of the Cold War period - and even during that period, I was not aware of any investigation of that sort of nature. I have to say that was a new one to me." The system was robust and transparent, he said. "The court martial, in my experience, has always been very careful not to be seen as a secretive court and generally does apply those principles the same way that they do in the civil court." This meant the starting point for suppression decisions was open justice. Another experienced court martial lawyer, Michael Bott, said talking to a military panel was somewhat different to addressing a jury. "There are military values you have to take into account and also, with a court martial, it's governed by the Armed Forces Discipline Act, as opposed to the Criminal Procedure Act, but the Bill of Rights still applies. "When you're doing an opening and a closing, the processes and techniques are pretty much transferable." He said suppression arguments at courts martial sometimes included matters not applicable to civilian courts, such as national security. Hodge said he didn't think the court martial would reflect badly on New Zealand's reputation. "I think there's the opposite argument that the allies could say, 'New Zealand is alert, New Zealand is sufficiently concerned about this matter and they're looking after whatever information this might be'. "While you could say, 'Is New Zealand a leaky sieve?', no, New Zealand is behaving properly and attending to the disciplinary side of a possible breach." If the soldier is found guilty next week, he won't face the death penalty. This was removed from military law in 1989, but sentences for courts martial range from losing rank to a lengthy term in military prison.
