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RAM will stop 'Big Brother' ARC

Thu, 02 Sep 2004

RAM media release 2.9.04

RAM will stop 'Big Brother' ARC raiding people's bank accounts

On 1 November, say the present ARC, they will order banks to take money out of the personal accounts of homeowners with mortgages who are refusing to pay last year's unfair rate hikes.

"The Local Government (Rating) Act 2002 allows the ARC to legally dip into the bank accounts of decent citizens on the Rates Revolt," said Grant Morgan, spokesperson for RAM - Residents Action Movement.

"But this law does not require the ARC to act in this Big Brother fashion. The ARC is going to raid people's bank accounts because they have taken a political decision to do so," said Grant Morgan.

"The RAM Committee has taken the decision that, if the council election returns a RAM-led ARC, we will convene a Citizen's Assembly on rates. This interactive people's conference will debate out a new rating policy that's fair to homeowners."

"The first act of a RAM-led ARC will be to stop the ARC from raiding people's bank accounts. That sort of Big Brother behaviour is a violation of democracy," said Grant Morgan.

Reprinted below is a letter from the ASB Bank about the issue.


Received: 18 February 2004 To: Elaine West (Auckland City Residents & Ratepayers)

In response to your email and our telephone conversation yesterday the Bank’s response to unpaid rates is as detailed below.

Section 62 of the Local Government (Rating) Act 2002 enables a local authority to recover any unpaid rates, as a debt from the Bank, as first mortgagee. Rates arrears for the billing period 1 July 2003 to the 30 June 2004 may be demanded on the 1 November 2004. (Note: Any mortgagor(s) who default on Water or Land rates can also be demanded by their respective councils on this date for the same billing period.) The council may send notice of default to the first mortgagee at least three months prior to demand.

Failure by the Bank to pay demanded arrears can result in the commencement of legal action by a council in order to recover the arrears. Therefore in the event that the local authority chooses to rely on section 62 the Bank has no alternative but to comply with its request. Any sums paid to the local authority will be treated as part of the money secured by the mortgage.

In most instances a standard fee of $50.00 will be charged when ASB BANK issues notice to mortgagors for payment of overdue local body rates. In the event that the Bank needs to pay the rates a further $60.00 fee will be charged.

If the effect of this action results in an unarranged overdraft, the Bank will be entitled to apply its usual right of set-off. That is, the amount can be met out of any credit balance in accounts held by the mortgagor(s) with the Bank, or alternatively the unarranged facility may be dealt with as a default under the mortgage which the Bank can recover, ultimately, by exercising its power of sale.

Please also note that the mortgage contains an undertaking to promptly pay any sums payable in respect of the land (i.e. rates).

Yours faithfully Tony Mooney Branch Liaison Officer Debt Assessment & Recoveries [verified by ASB Head Office]


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