The Commerce Commission has launched legal action against two vehicle finance companies, alleging both breached lending rules by failing to properly assess whether borrowers had the financial means to enter into a loan.
The commission says the prosecution is its most significant action in the car finance sector ever and involves seeking pecuniary penalties.
In a statement today, the commission’s general manager credit Louise Unger said the decision to prosecute comes after a long-standing investigation into Go Car Finance and Second Chance Finance.
Go Car Finance is the New Zealand subsidiary of Australian company Solvar, which is publicly listed on the ASX.