Hawkins' loans companies charged by Commerce Commission

Allan Hawkins, one of the directors of Budget Loans. Photo / Dean Purcell

Two consumer finance companies directed by New Zealand businessman Allan Hawkins are facing criminal charges that alleges their repossession and debt recovery practices breached the Fair Trading Act.

The Commerce Commission said in a statement this morning it had filed criminal action in the Auckland District Court against Budget Loans and Evolution Finance.

According to the regulator, Budget Loans and Evolution Finance allegedly breached the Fair Trading Act and misled debtors.

The commission alleged the companies repossessed debtor's property - or threatened to - when they did not have the right.

The companies are also accused of adding interest and costs to loan balances after property had be repossessed.

As well as this, Budget Loans and Evolution allegedly told those who owed money they had less time to fix loan defaults before repossession than they required under the law.

It is the second time that Budget Loans has been in the gun and the company admitted 34 Fair Trading Act charges in 2010 and was fined $30,750.

"Ultimately it is now for the Court to decide whether the evidence shows that Budget Loans' and Evolution Finance's conduct was illegal. However, all finance companies should be aware that we are paying close attention to their conduct and won't hesitate to act if we believe they are misleading debtors about their rights and obligations," Commerce Commission's Mary-Anne Borrowdale said today.

Allan Hawkins and Wayne Hawkins are list on the Companies Office as directors of both Budget Loans and Evolution Finance.

According to the commission, the pair of firms purchased loan books from failed finance companies such as National Finance and Western Bay Finance.

Allan Hawkins, in his 70s, is most well known in this country for heading Equiticorp, which failed in 1989.

In the aftermath of this collapse he was sentenced to six years' jail in 1993 on seven fraud and conspiracy charges on transactions worth $520 million after one of the longest and most expensive trials in New Zealand.

He served two years in jail.