As a negotiating tactic, it failed. Challenged by Commerce Commission that its platform fee was an unreasonable credit charge, Harmoney asked what might be considered reasonable. That is for the court to decide, the Commission responded.
In 2018, the High Court ruled Harmoney’s ‘platform fee’ charged on each ‘peer-to-peer’ loan formed part of the loan contract, being part of the cost of credit. Harmoney argued unsuccessfully that it did not make loans; it was merely a ‘match-maker’ bringing together lenders and borrowers. This litigation is ongoing. The Commission alleges Harmoney’s charges levied as a platform fee are unreasonable in that they exceed its costs for establishment of a loan contract. Harmoney responded, requesting a detailed analysis by Commerce Commission as what might be a reasonable charge. Ostensibly, this request was to narrow the issues before heading back to court. In practice, it would enable Harmoney to sharpen its pencil in offering an out-of-court settlement. Commerce Commission refused to play ball. It does not have details of Harmoney’s cost structure, it said. That is for Harmoney to disclose. The High Court agreed.
Commerce Commission v. Harmoney Ltd – High Court (30.3.21)
21.058