Moola offers loans to borrowers via its website. Prior to the introduction of a daily rate of charge cap in June 2020, it offered loans with interest rates as high as 620.5% per annum.
The commission started investigating Moola after receiving a number of complaints, including from a Christchurch budgeting service.
In September 2017, the District Court raised concerns about the level of Moola's fees and invited the commission to intervene in debt recovery proceedings taken buy the lender.
During the period of the commission's investigation, Moola charged default fees of $60 where the reasonable fee as calculated by the commission was from $10 to $15.
It charged establishment fees of $150 or $350 depending on the term of the loan, where the reasonable fee as calculated by the commission was either $4.47 or $548, and processing fees of $50 where the reasonable fee as calculated by the commission was either $10.86 or $12.25.
It said Moola was likely to have breached the law with these fees, between February 2016 and July 2017.
"Fees must recover costs that are 'relevant and closely connected to the activity for which the fee is charged. The commission's view is that Moola's fees recovered more than those costs," commission chairperson Anna Rawlings said.
"Moola agreed to identify affected customers and calculate the difference between the amount charged and the reasonable amount calculated by the commission, which it has now done."
Affected customers will be credited or refunded by Moola within the next 12 months," Rawlings said.
It has agreed to publish information on the agreement on its website so customers can check for details.
The commission has also taken High Court proceedings against Moola alleging irresponsible lending in a separate action.
