A review by the Commerce Commission has found lenders are charging up to 803 per cent a year in interest rates.
The commission carried out research on the websites of 215 companies who lend money to the public last year to see whether they met certain requirements under the Credit Contracts and Consumer Finance Act (CCCF).
The CCCF Act did not cap interest rates, prescribe how lenders should name fees or impose a limit on the number of fees a lender may apply.
"We observed significant variation in interest rates and fees," said Commissioner Anna Rawlings.
"The review found interest rates ranging from no interest at all, all the way through to 803 per cent per annum. We also found more than 500 names used for fees ranging from $5 to $5,000."
One in four non-bank lenders may be in breach of consumer borrowing laws, according to the review.
Under that law lenders must prominently display information on their websites like interest rates, fees and contract details.
But the review found 46, or 21 per cent, of the 215 lenders checked failed to comply with one or more of their obligations.
Rawlings said failure to disclose the information breached the law and deprived consumers of information they needed to make informed choices.
The Commission had since contacted all of the lenders to remind them of their responsibilities.
"While most lenders have shown a willingness to make changes, we will be checking back later in the year and will consider further action if they have failed to comply," she said.
The Commission can take legal action against companies which fail to comply.
Companies found to be in breach by the courts can be fined up to $600,000 while individuals can be fined up to $200,000.
Rawlings said the review provided good insight into the information being provided to consumers and some of the difficulties the public may face in trying to access and understand the true costs of borrowing.