Savings scheme

Home Funding Group fined $ 400,000 for “savings” program

A company has been fined $ 400,000 for falsely claiming to offer a savings program to help low-income families buy homes, following a Trade Commission investigation.


Home Funding Group Limited (HFG) was found guilty of two counts under the Fair Trading Act by the Auckland District Court on January 12. She is in liquidation and did not appear at the hearing.

The company offered services to potential home buyers who had difficulty saving for a deposit or accessing bank financing.

He claimed to be running a savings plan that could help clients buy a home with a deposit as low as 5%. However, customer payments were not made or treated as part of any savings plan, according to a Commerce Commission statement.

The contracts concluded by the clients were for a brokerage and financial coaching service. Between February 2015 and April 2017, the company received $ 316,361 from 149 clients. They typically paid the company $ 50 to $ 100 per week.

Trade Commission Chairman Anna Rawlings said the company’s claims prompted consumers to make regular payments to the company, believing they were putting money in for a security deposit, but This was not the case.

“In fact, they were paying for financial services, and the HFG contract allowed HFG to limit or avoid providing those services,” she said.

During the presentation to the clients, HFG made various statements, including that at the end of the term of the contract, the clients would get back the money they paid to them, that the money paid to HFG could be used for a security deposit and that the company had special relationships with various banks. .

“HFG had no special relationship with any bank. The money paid could not be used for a deposit, and the Commission is not aware of a single client who entered into the HFG contract and bought a house successfully, ”said Rawlings.

In his remarks on the sentence, Judge Bouchier said it was a “carefully crafted plan” and that the conduct involved “a serious offense against vulnerable persons”. She noted that the affidavits of four victims were “extremely sad” and “heartbreaking” and that the four complainants were still unable to buy their own homes.

It ordered the full reimbursement of eight plaintiffs named in the Commission’s case and canceled their contracts.

As the company is currently in liquidation, the liquidator will determine whether the repayments will be made.

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