Christchurch lender fined $15,000 for unregistered lending

A Christchurch lender that charged some borrowers up to 55.61% in interest repayments has been fined $15,000 for providing consumer credit without being registered.

4J Enterprise Ltd (4J) issued 46 new loans totalling $81,110 to 27 borrowers and collected about $65,000 in interest on 50 new and existing loans over 18 months despite being unregistered.

The loans were between $500 and $15,000, ranging from six months to two years.

While 4J said it charged an annual interest rate of 33%, its records show some borrowers were charged up to 55.61%.

4J pleaded guilty in June to a representative charge under section 11 of the Financial Service Providers (Registration and Dispute Resolution) Act 2008.

Director Hope Suan and senior manager Juvy Suan pleaded guilty as parties to the company’s offending. They were sentenced in the Christchurch District Court to 140 hours and 150 hours of community work respectively.

Louise Unger, executive director for response and enforcement at the Financial Markets Authority (FMA), said lenders providing consumer credit had to meet the applicable registration and licensing requirements.

“These requirements are there to help ensure lenders meet minimum standards and can be held accountable for complying with New Zealand’s consumer credit laws.

“If you need a licence and registration, have them in place before you lend.

“Despite 4J being told in May 2024 that it couldn’t lend without being registered, or being certified by the Commerce Commission, which was the requirement at the time, it carried on for another 18 months.”