Greater protection for consumers in new law
7 October 2003
Greater protection for consumers in new legislation
The Credit Contracts and Consumer Finance Bill passed by Parliament today replaces outdated credit law with strong, innovative legislation to better protect New Zealand consumers, says Consumer Affairs Minister Judith Tizard.
“This legislation provides greater protection for consumers in relation to credit contracts, consumer leases and buy-back transactions,” said Judith Tizard.
“Buy-back schemes are a particular focus of the legislation. This government is committed to stamping out these schemes which have resulted in many innocent homeowners losing their homes through the actions of unscrupulous creditors.”
Judith Tizard said tough penalties and new disclosure requirements will create a disincentive for operators to continue running these schemes. These measures will protect consumers against further losses from buy-back schemes as well as providing remedies for those already involved in such schemes.
“This legislation improves the information disclosure requirements for all consumer credit transactions so that consumers will receive meaningful information about the cost and terms of credit. This will enable consumers to make informed decisions when entering into and during the course of, financial transactions.
“Fair and flexible rules relating to fees and interest charges will protect consumers from unreasonable charges.
“Creditors who flout the law and exploit consumers face increased penalties and the prospect of rigorous enforcement. The new Act empowers the Commerce Commission to take action in response to breaches of the law.”
Judith Tizard said as well as benefiting consumers, the legislation also meets the needs of creditors by simplifying the law and some administrative requirements, as well as reducing compliance costs for providers and borrowers of commercial credit.
“This is good law for consumers and creditors. It is the final plank in a raft of consumer protection legislation that I have steered through the House this year. I am confident that it will improve consumer protection and enhance the consumer finance market and I’m proud to be part of a Labour-Progressive Government showing leadership in this area.”