Harmoney

**Knot** · 13-05-2016, 12:19 AM

Brian Barefoot from LC USA is on The Harmoney Advisory Board

**kiwi_on_OE** · 13-05-2016, 04:34 AM

I've got two issues 1) the size of the fee increase, and 2) the way it has been represented. The former is up to me to do something about, and I will be approaching the alternative providers. Here's my views on the latter.

The Dec 15 interest rate increases were done as part of their move from a variable/risk-adjusted fee to a flat fee, with the intention that borrowers paid around the same amount overall.

The theoretical example on their website uses interest rates from before the change, links/compares them with current interest rates, with the implication that the current fee change is related. I think that is pretty clearly misleading or deceptive. The Fair Dealing section of the FMC Act deals with "misleading or deceptive conduct".

Harmoney, you may wish to change the example otherwise I will complain to the FMA on Monday.

**Art** · 13-05-2016, 08:24 AM

Originally Posted by Knot

Now take off RWT at your rate (remember it comes off of the gross, not the nett) and your actual return is....

Yes, but that gets fixed when you file your annual tax return (well, the fees part anyway, the losses part is somewhat less clearcut)

**Knot** · 13-05-2016, 08:46 AM

Originally Posted by Art

Yes, but that gets fixed when you file your annual tax return (well, the fees part anyway, the losses part is somewhat less clearcut)

Yes you will get a small refund on the extra RWT you have paid, but that does not change the purpose of the exercise, to show what you actually get for all that risk.

**Knot** · 13-05-2016, 08:47 AM

In a private email a Harmoney Employee has told me that if they did not do this they would go bust.

Perhaps the expansion into Australia is not going so well, plus all the advertising etc.

**mlt322** · 13-05-2016, 08:52 AM

In a private email a Harmoney Employee has told me that if they did not do this they would go bust.

"Whoop, whoop......warning, warning"

**Saamee** · 13-05-2016, 09:00 AM

Originally Posted by Knot

In a private email a Harmoney Employee has told me that if they did not do this they would go bust.

Perhaps the expansion into Australia is not going so well, plus all the advertising etc.

Beware of Internet Trolls!!

To post on here something like that unsubstantiated = Diddly Squat....!

Post the Email and I would believe you

**Bjauck** · 13-05-2016, 09:51 AM

Originally Posted by Art

Yes, but that gets fixed when you file your annual tax return (well, the fees part anyway, the losses part is somewhat less clearcut)

Are you certain that service charges will be deductible for all investors including for those who are "not in business"?

Harmoney states on their website (my emphasis): We expect that fees paid by Investors will be tax deductible. Each Investor’s circumstances are different, so we recommend that they seek independent tax advice
https://www.harmoney.co.nz/how-it-works/fee-changes-for-lenders

So they only "expect". There has been no guidance from IRD and apparently Harmoney is no longer seeking guidance on behalf of the various types of investors in this new category of financial investment.

In an item about p2p lending on mortgagerates,co,nz an IRD "spokesperson" is quoted: Generally, for the lender to be able to claim expenses relating to their lending, such as commissions and other fees, they would need to be in the business of lending. http://www.mortgagerates.co.nz/artic...ax-advice.html

So for an investor not "in business" it seems not to be clear cut, So definitely DYOR. Deductibility of service charges is set to have an even greater impact on after tax returns after these proposed hike in charges are due to take effect. The tax treatment of investors' p2p returns needs guidance from IRD imo.