Lender Eagle MAN fined $200,000 after charging customers up to 182.5% in interest

The Commerce Commission labelled Eagle MAN's breaches unacceptable. Photo / 123RF

Christchurch-based lender Eagle MAN Loans has been ordered to pay a $200,000 pecuniary penalty for providing high-cost loans which breached the Credit Contracts and Consumer Finance Act (CCCFA).

In some instances customers were charged an interest rate of 182.5% per annum, on top of credit and default fees, the Commerce Commission said.

It’s the commission’s first case enforcing rules applying to high-cost lenders as part of the CCCFA.

Commerce Commission deputy chairwoman Anne Callinan warned there were extra requirements lenders must meet for high-cost loans.

“Loans that have an interest rate of over 50%, and in Eagle MAN’s case over 100%, can push consumers into debt spirals that are very difficult to get out of and cause a lot of harm to consumers and their families,” Callinan said.

“The majority of loans Eagle MAN issued were to consumers who were financially strained, recent immigrants, or on temporary work visas – these consumers were likely facing significant need which could have made them more vulnerable to high-cost lenders.

“Eagle MAN should have had compliance processes in place to make sure that these consumers were treated fairly.”

The Christchurch High Court agreed with the commission that it was likely breaches of the CCCFA occurred across Eagle MAN’s high-cost loan book in the period from May 2020 to August 2022.

The decision was made based on a sample of high-cost loans analysed by the commission, in which over half of the loans disclosed a breach of the CCCFA.

“This court ruling is significant as it shows these breaches were systemic and the penalty reflects the overarching scope and scale of the high-cost loan breaches – 59% of consumers faced breaches, which is unacceptable,” Callinan said.

The Herald has approached Eagle MAN for comment.

Eagle MAN’s website says it has been providing short to medium-term loans for over a decade.

It offers bronze, silver, gold and platinum loan packages ranging from $300 to $5000.

“Your financial success is our number-one priority,” its website says.