Commerce Commission seeks to claw back $680,000 from finance company Linsa Finance

Regulator has filed High Court proceedings against Linsa Finance.Photo / Screenshot

The Commerce Commission is seeking to claw back more than $650,000 from a finance company for 1700 borrowers on loan contracts.

The regulator has filed High Court proceedings against Linsa Finance and is seeking orders for it to return costs of borrowing totalling around $680,000.

It is also seeking that Linsa Finance pays damages to affected borrowers for failing to disclose key information required under the Credit Contracts and Consumer Finance Act.

Linsa Finance, which has offices in Manurewa and Tauranga, offers secured and unsecured personal loans of up to $4000.

The commission alleges that between June 2015 and March 2016 Linsa Finance's loan approval contracts failed to include all key disclosure information, which is mandatory in legislation.

Failure to disclose key information means borrowers are not liable to pay interest or credit fees charged by the lender during the period of non-compliance, according to section 99 of the Credit Contracts and Consumer Finance Act 2003.

The Act allows for statutory damages against a lender if it fails to comply with rules about disclosure for borrowers for guarantors. This also applies to failure of disclosure of credit-related insurance, repayment waivers and extended warranties.

The commission would not comment further as the matter is now before the Court.

The Herald has approached Linsa Finance for comment.