Loan shark' snaps back at his critics

Despite what people think, we have a set of values, we behave properly. We have 26,000 customers who would fight tooth and nail to defend us.Richard de Lautour,
Instant Finance CEOA finance-company boss, who is visiting Hastings with league legend Stacey Jones, has hit back at "ignorant" critics.
This week, Labour MP Stuart Nash said Instant Finance was a loan shark and Napier Family Centre chief executive Roydon Day also advised people to avoid the company.
But Instant Finance chief executive Richard de Lautour, who is opening a new branch in Hastings, says otherwise.
"Mr Day says there are plenty of mechanisms rather than borrowing more money," Mr de Lautour said.
"When Mr Day's found them I'd like to know about it, because usually when mum and dad are at home and the washing machine is knackered and they've got five kids, actually I think they need the money.
"People have this view that somehow because people have lower incomes they do not have the right to borrow money. It astounds me.
"A $3500 loan at 29.5 per cent [interest], which is our top standard rate, repayable over two years, costs $52.92 a month. People might say that 19 per cent is a better rate but the difference is $4.93 a month - which may get you a cappuccino.
"If that was a $40,000 loan things would look completely different but that's not what we do."
He said many of his customers shunned banks because of past credit problems and were treated by them poorly.
Instant Finance's branch-based business model, which provides a lot of face-to-face contact, is one reason his company is forced to charge more, Mr de Lautour says.
"It costs us more to lend to a first-time customer a small loan of $2500. We take their household chattels, their furniture and TV as security. We have a look at the house, we have a look at the furniture, we check that they own it, we check their tenancy agreements and make a budget - there is no way in the world anybody walks out of here unless we are absolutely sure they can afford it.
"We've got four full-time agents in Auckland that do nothing but go around and check people's houses. Part of that is that you understand the demeanour of the household ... Is there an angry pitbull?"
Wholesale money markets are another cost to the business - Instant Finance pays a premium because of its smaller size.
Mr de Lautour says "mum and dad" debenture investors were paid out in 2009 after investor confidence "quite rightly" fell in the industry sector. The business had been around for 40 years and had never missed an obligation, he said.
It was owned mainly by Auckland-based individuals. The Nausbaum family owns 51 per cent and Peter Mitchell, owner of racehorse Bonecrusher, owns 25 per cent. "These people are about as far away from the Hotchins and Watsons as you could get," Mr de Lautour said.
He said past critics had declined to visit the business for a briefing.
"How do you deal with people who decline an opportunity to visit, and [who] base their stories on ignorance?
"Then we get accused of 'using' Stacey [Jones]. Despite what people think, we have a set of values, we behave properly. We have 26,000 customers who would fight tooth and nail to defend us.
"Stacey has the same values that we have - it's hard to find a rugby league player that hasn't got a bit of muck around him."
He said Mr Nash's comments, which doubted Jones' financial literacy, were wrong. Jones was a business owner who completed due diligence on the company before endorsing it.
"Stacey knows an awful lot more about it than [Mr Nash] does. Stacey's a mild-mannered, immensely likeable businessman and I think it's very sad to see him treated this way."
Mr de Lautour said the real debt problems were among the middle classes, which were often caused by large retailers offering interest-free finance on unnecessary items - compared with his company's smaller needs-based loans.
Banks also behaved badly, he said. "It is outrageous what the banks do with credit cards.
"If you have your credit card with the same bank you have your mortgage with, your card is secured against your house - they don't make that clear."
But he said loan sharks were real. Some of his clients who refused the full amount of a loan had visited other finance companies to top up their borrowings. "The next day a second charge against their chattels had been lodged with the personal property register. That will be at much higher interest rates - that is where the wheels start to fall off."