A group of debt collectors has agreed to credit 1700 customers more than $1.4 million because they were wrongly charged interest and fees after goods had been repossessed, says the Commerce Commission.
The regulator said that it had probed whether Receivables Management - a group of five companies - had breached the Fair Trading Act.
"When borrowers are in default, lenders essentially have a choice between issuing proceedings and continuing to charge interest and fees or repossessing secured goods which freezes the amount owed under the loan," the commission's Antonia Horrocks said.
"They can't repossess and continue to charge interest and fees," she said.
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The group has agreed to refund all affected borrowers by the end of March 2018, the commission said.
"We are pleased that Receivables Management is crediting refunds to affected customers. The group has cooperated throughout our investigation and is taking steps to ensure it does not happen again," Horrocks said.