Harmoney

[myles]

I was referring to relevant, traceable costs (to the application process) which is what the Commerce Commission will care about when they sit down with Harmoney for a chat.

I wasn't specifically referring to what you said - just highlighting that Harmoney are operating at a loss - which leads to the idea that perhaps they are not charging enough to cover their costs, which are clearly not all covered by the platform fee (actually only a relatively small portion are which may well be fair and reasonable)...

I personally am not convinced that the actual case being brought forward (which has nothing to do with the amount being charged), will succeed. From my perspective there is a significant difference between *platform fee* and *credit fee* and how Peer-to-Peer borrowing/investment work - it will be interesting to see the courts *clarification*.

My take on the Fee: Peer-to-peer lending/investment is quite different from traditional banking. The Harmoney platform has been created and is required for the borrowing process to occur, hence all costs associated with it (as hinted at in a number of previous posts), can *reasonably* be charged (the original weighted fee not so much - which could be problematic for Harmoney).

We will just have to wait for the outcome of the initial 'clarification' of *credit fee*. It could be another few years before they get to the actual fee amount...

[Investor]

I wasn't specifically referring to what you said - just highlighting that Harmoney are operating at a loss - which leads to the idea that perhaps they are not charging enough to cover their costs, which are clearly not all covered by the platform fee (actually only a relatively small portion are which may well be fair and reasonable)...

I personally am not convinced that the actual case being brought forward (which has nothing to do with the amount being charged), will succeed. From my perspective there is a significant difference between *platform fee* and *credit fee* and how Peer-to-Peer borrowing/investment work - it will be interesting to see the courts *clarification*.

My take on the Fee: Peer-to-peer lending/investment is quite different from traditional banking. The Harmoney platform has been created and is required for the borrowing process to occur, hence all costs associated with it (as hinted at in a number of previous posts), can *reasonably* be charged (the original weighted fee not so much - which could be problematic for Harmoney).

We will just have to wait for the outcome of the initial 'clarification' of *credit fee*. It could be another few years before they get to the actual fee amount...

Yes it will be very interesting to see how it pans out

[icyfire]

I wasn't specifically referring to what you said - just highlighting that Harmoney are operating at a loss - which leads to the idea that perhaps they are not charging enough to cover their costs, which are clearly not all covered by the platform fee (actually only a relatively small portion are which may well be fair and reasonable)....

Harmoney is only operating at a loss due to spending a huge amount on advertising and that's their choice. Using your argument all banks could argue that they should also be allowed to charge their customers unreasonably high fees so they could cover their marketing costs. Harmoney is now a household name in the NZ P2P lending market and most Kiwis have heard of it. Sorry, but I don't buy your argument and I hope that ComCom are successful in court. Harmoney needs to toe the line and play by the rules.

[myles]

Harmoney is only operating at a loss due to spending a huge amount on advertising and that's their choice. Using your argument all banks could argue that they should also be allowed to charge their customers unreasonably high fees so they could cover their marketing costs. Harmoney is now a household name in the NZ P2P lending market and most Kiwis have heard of it. Sorry, but I don't buy your argument and I hope that ComCom are successful in court. Harmoney needs to toe the line and play by the rules.

? I didn't mention marketing?

Banks typically charge between $250 - $300 - they don't have a peer-to-peer 'platform' like Harmoney do to build/maintain etc? Banks profit from the full Interest rate - Harmoney only receive 15-20% of the Interest in fees charged to lenders not borrowers. There are some significant differences!

There are no specific rules for peer-to-peer lending, that is what the whole issue is about!

[icyfire]

Banks typically charge between $250 - $300

Banks charge $250 for a new loan application and $150 for topping up an existing loan, Harmoney charges $500 for each. The difference is hundreds of dollars which is a lot of money for borrowers already paying a high interest on a loan.

they don't have a peer-to-peer 'platform' like Harmoney do to build/maintain etc

Banks have much bigger IT systems to build and maintain, there isn't even a comparison.

Banks profit from the full Interest rate - Harmoney only receive 15-20% of the Interest in fees charged to lenders not borrowers. There are some significant differences!

The difference is that banks borrow money at 3% from offshore and NZ households and then loan it at 15-20% interest. On the other hand Harmoney uses your money and my money and then charge you and me 15-20% for the privilege.

There are no specific rules for peer-to-peer lending, that is what the whole issue is about!

Yes, there are rules and that's the reason ComCom has decided to take Harmoney to court. The more rules there are around P2P lenders, the more lenders and borrowers will be protected. That's a good thing.

[myles]

icyfire, you really do look at things with tinted glasses

[icyfire]

icyfire, you really do look at things with tinted glasses

Play the ball, not the player! At the end of the day, the court will decide

[myles]

Play the ball, not the player! At the end of the day, the court will decide

I'm not playing, I'm investing!

Some of what you come up with is just not thought through enough for me to be bothered to address/argue. Sorry...not playing...

[myles]

Very simplified set of numbers of Institution return for a $10,000 loan (please read the notes):
Bank vs Harmoney.jpg
Would a bank offer a loan to a Harmoney C Grade borrower?

[RMJH]

Play the ball, not the player! At the end of the day, the court will decide

ASB made $1,000,000,000 last year. You really think banks like them offer a better deal?! At least P2P is transparent and they don't create money.