Loan companies in super hero stoush

NZ Herald

19 Dec, 2012 04:30 PM2 mins to read

Two personal finance companies - one of which charges over 500 per cent interest a year if loans are not paid back in two weeks. Photo / David White

Two personal finance companies - one of which charges over 500 per cent interest a year if loans are not paid back in two weeks - are in a High Court stoush over a super hero logo.

Superloans, which has offices in Napier, Lower Hutt, Porirua, and Wellington, is trying to stop a similar firm, Cashburst, from using a super hero in its advertising.

Cashburst has been tempting Christmas shoppers this December with offers for an "interest-free" loan of up to $500 and has been advertising on the radio and television.

However, the interest-free period it offers lasts for only two weeks and after that Cashburst charges interest of 552 per cent a year.

North Shore Budgeting Service's Brian Pethybridge was aghast at Cashburst's interest rate.

"Next they'll be asking for children as collateral," he told the Herald on Sunday last week.

Superloans sells what it calls a "free" loan.

The company has an offer on its website for a loan of up to $500, interest-free for 28 days. But after this period, it charges 4 per cent in interest per week, or 208 per cent per year.

Both Cashburst and Superloans' websites feature a caped, cartoon mascot.

Cashburst's television advert tells viewers "don't panic - Captain Cashburst to the rescue" while a Superloans video on its website said it is "here to save the day".

Lawyers representing both sides appeared before Justice Mark Woolford in the High Court at Auckland yesterday, which heard Superloans had filed proceedings to restrain Cashburst from using the super hero logo in its advertising.

The case is due to be argued more substantively in February, but in the meantime Cashburst has agreed not to use the super hero in print or television ads, Justice Woolford said.