Unlicensed money lender must forgive debts

The commission was unaware exactly how much Sunway's customers owed. Photo / iStock

Regulators are unaware of how much money people owed to an unlicensed Auckland money lender, which has now been convicted and must forgive their debts.

Sunway Finance Limited, formerly owned and operated by Yuan Rong Yang, was found guilty of three charges brought by the Commerce Commission under the Credit Contracts and Consumer Finance Act 2003 in Auckland District Court on Friday.

The company was fined $30,000 and all of its contracts were extinguished.

However, the commission was unaware exactly how much Sunway's customers owed.

"We are aware of over $30,000 in payments to Sunway Finance, but were unable to establish exactly how much its customers owed. This was due to the lack of proper documentation, and some borrowers being reluctant to tell us the amount of their debt," a commission spokeswoman said this afternoon.

When Yang appeared in court on similar charges in October, he was fined $22,500, banned from lending indefinitely and was ordered to pay $3000 to a complainant. At the time, his loan contracts were also quashed.

According to the Commerce Commission, Yang had been lending to Auckland's Chinese community for at least 17 years.

In sentencing Sunway, Judge Christopher Field said: "There was a general and blatant failure to provide the necessary documentation to those who may well have been desperate and prepared to enter into any agreement, sight unseen."

In October, Yang pleaded guilty to charges relating to failing to provide key information to his customers about their loans.

At his sentencing in Auckland District Court, Judge Mary Sharp described him as "an unscrupulous lender, a loan shark" who was charging "exorbitant and appalling" interest rates.

He loaned money personally, and through his business -- part of which involved him targeting potential borrowers at SkyCity Auckland Casino, which led to him trespassing on the premises in November 2012.

Commissioner Anna Rawlings said Yang often made verbal agreements with borrowers, who were often members of his own community, rather than having signed contracts.

"Mr Yang operated his business without disclosing any basic information to borrowers, including his method for charging interest, the credit fees and charges, the amount of each repayment and total number of payments required. The law requires lenders to disclose this information, and more, to ensure that borrowers can properly understand the obligations they are committing to when taking out a loan," Ms Rawlings said.

One complainant was charged $50 interest a week, for every $1000 borrowed -- which equated to an annual interest rate of about 260 per cent. The complainant continued to borrow money and by May 2013 owed Mr Yang $15,000 and about $870 a week in interest.