New laws sought to fix credit law loopholes
Acting Consumer Affairs Minister, Jim Anderton, has asked for a fast track of the Credit Law Review as a result of the practices of a few loan companies. One particular practice of concern is, as a condition of making some loans, companies taking their customers ATM cards and pin numbers from them.
"I have asked the Ministry of Consumer Affairs to fast-track their work on Credit Law. I would like to see a report ready for Cabinet by the middle of this year, so that legislation can follow as soon as possible," said Jim Anderton.
"A proposal in the review is to have a public agency enforce consumer credit law," said Jim Anderton. "Such an agency would actively deal with oppressive behaviour by financiers, taking court action where appropriate."
Two companies that have come to light recently are Funaki Enterprises, operating in Auckland and Wellington, and Small Loans Ltd of Napier. Funaki Enterprises also take borrowers photos and publish them in the Tongan newspaper if the debtor doesn't pay their loan.
These ATM Card and PIN number practices are not necessarily illegal although they may be "oppressive" under current legislation.
"The worst aspect of the two cases is that these companies are targeting low income people who may have few options if they need money," said Jim Anderton.
Funaki Enterprises targets Tongan communities, and there have been complaints that it doesn't spell out its terms and conditions to customers, something all loan companies should do.