Credit Law Review Papers Released
The Minister of Consumer Affairs Phillida Bunkle has today released two discussion documents as part of the Consumer Credit Law Review.
The documents – parts two and three of the five-paper review – address application and transparency issues.
"This Review is an important undertaking. Existing credit laws are outdated and urgently need to be brought into the 21st century," Ms Bunkle said.
The papers released today raise questions about whether consumers are given enough information before they enter credit deals, and whether businesses should be covered by consumer credit legislation.
"Credit issues can get people into problems with debt. Consumers need to know the real cost of credit. For example, when people sign up for credit, are they aware of all the charges such as costly penalties, establishment fees, broker fees and statutory fees. As another example consumers are often unfairly penalised for paying off debt early.
"And it seems bizarre that anyone with a mortgage over $250,000 is not protected under consumer credit legislation."
The Minister is calling on interested groups to make submissions on the papers.
"There are many issues to be addressed as part of this Review and I encourage discussion on these papers. It is important to consider small businesses and how the Review considers their position. I encourage their input into these discussion documents."
Submissions on the latest documents will be received up to Friday, 14 July, 2000.
Two further reports looking at redress and enforcement, and other issues will be released later this year. The Ministry is expected to make its final recommendations to Government in mid-2001.