The Dunedin Budget Advisory Service says it has seen about five clients who have ended up with high interest loans from a company known either as MYFI New Zealand or BHF Solutions.
The service’s executive officer Andrew Henderson said most clients here started trying to get a loan through a company known as Pretty Penny and were often rejected.
"They apply for Pretty Penny who are still trading, but under investigation by the Commerce Commission, and get declined.
"Then a couple of days later, they’ll get contacted by MYFI and [they] say ‘oh we can lend you money’."
Pretty Penny is the company name at the face of QUADSAA Ltd, which is presently under investigation by the Commerce Commission.
Pretty Penny is alleged to have offered loans of between $50 and $550 for between 1 and 92 days with a compounding daily interest rate of 1% or 365% yearly.
Mr Henderson said he had seen loans similar to what was being investigated by the commission.
The commission said the company gave out the loans between September 2016 and June 2017.
It alleges Pretty Penny failed to exercise the care, diligence and skill of a responsible lender, as required by the lender responsibility principles.
Mr Henderson, who lives in South Dunedin, said he had regularly seen flyers for Pretty Penny appearing in letter boxes there.
One of the clients of the Dunedin Budget Advisory Service was a woman who had taken out a loan of $250 from MYFI and after negotiations, got her total repayment to $560.
Mr Henderson said QUADSAA and MYFI were linked and possibly owned by the same Australian company. A companies search shows the directors of MYFI New Zealand and QUADSAA Ltd are registered at the same address.
Mr Henderson said his client’s complaints were managed by MYFI itself and her repeated requests to be referred to an independent financial dispute resolution scheme were ignored.
The Dunedin Budget Advisory Service regularly uses a financial dispute resolution schemes to help clients work through difficult debts.
When another budget adviser at the Dunedin service began contacting MYFI in October last year, the company said it did not have to have a disputes resolution scheme and referred him to BHF Solutions.
"Everybody in New Zealand ... if you lend money ... you have to be a registered financial service provider. One of my workers wanted to complain about MYFI.
"If you’re a registered financial service provider you also have to belong to an independent disputes resolutions scheme by law to sort out disputes and they don’t have one."
By not offering an independent disputes pathway and lending money, Mr Henderson said MYFI was breaking the law.
Mr Henderson said about three weeks ago MYFI New Zealand registered as having a financial disputes resolution scheme.
The Dunedin Budget Advisory Service said it wanted to hear from anyone who had taken out a loan with either Pretty Penny or MYFI New Zealand.
MYFI New Zealand has not responded to requests for comment.
