Global: Payday lender Moola in liquidation

Payday lender Moola has gone into liquidation after its parent company, NZ Fintech Group, was placed into receivership.

Thomas Rodewald,​ from Rodewald Consulting, was appointed as receiver of NZ Fintech Group Holdings, following an application from its creditor, US-based Partners for Growth (PFG).

Rodewald​ said it was obvious there had “clearly been issues with the companies for a while”.

“PFG has called its money in, and called in receivers to sort its position out… We can’t really comment on the position of the companies because we are still trying to establish it,” Rodewald​ said.

Rodewald​ confirmed he had placed 10 subsidiary companies of NZ Fintech into liquidation, including Moola, vehicle finance company Zooma and payday lender Needcashtoday.

The websites for all three businesses are out of action.

In December 2021, the Commerce Commission said Moola had engaged in cartel conduct with its online advertising.

That involved Moola reaching agreements with other loan providers to not bid on each other’s brand names on Google Ads and to also “negatively match” certain keywords so that their advertisements would not show when those keywords were used.

Commerce Commission chairperson Anna Rawlings​ said this meant that consumers searching for a lender on Google might not see ads for other loan providers, limiting their access to information about alternative companies and services.

That was likely to have reduced their ability to make informed choices, she said.

Moola had previously been censured by the commission in October last year when the Commerce Commission said it had failed to behave as a responsible lender.

The commission investigated 50​ loans Moola made between June 2015 and November 2017​ and said Moola had failed to check why people were borrowing money, and whether they could really afford repayments.

Moola also failed to meet responsible lending standards when it advertised further loans direct to borrowers, the commission found.

“Moola did not consider the purpose of the loan when determining whether to advance the loan for some borrowers and some borrowers seeking a top-up loan were not required to state the purpose for their loan at all,” Rawlings​ said.

Moola admitted it had failed to exercise the care, diligence, and skill of a responsible lender and repaid the interest and fees of the 50 loans investigated by the commission.

In March 2021, Moola paid $2.8 million to current and former borrowers after it acknowledged it charged unreasonable credit and default fees.

Before a law change in June 2020 which capped daily rates, Moola was charging annual interest rates as high as 620%.