Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Review highlights lending and debt collection issues

Hon Kris Faafoi

Minister of Commerce and Consumer Affairs

Consumer finance review highlights lending issues and debt collection practices

Stakeholder feedback has confirmed that predatory practices, irresponsible lending and unacceptable debt collection practices are still impacting on vulnerable New Zealanders.

Minister of Commerce and Consumer Affairs Kris Faafoi said research, undertaken by the Ministry of Business, Innovation and Employment, confirmed his fears.

“While many lenders have improved disclosure and the information provided on their web sites, consumer advocates are expressing strong concerns about the high cost of credit, and inadequate assessments of the affordability of loans.

“People are being provided loans they are not going to be able to pay back, and are drawn into situations where the cost of the resulting debts is many times the original due to interest rates and penalty charges.

“Clearly the reforms of the CCCFA in 2015 didn’t go far enough and we need to act to protect people from the appalling burden these debts can create.”

The research is part of a review of consumer finance regulation and is likely to lead to new legislation.

“I expect to release a discussion paper on the key issues and proposed solutions around the middle of this year. This will report the findings of the review. It is likely to consult on a number of options for interest rate caps, as well as options for improving compliance with lender responsibilities.

“The review is also looking at the debt collection methods employed by some debt collection agencies. Unrealistic repayment schedules, debtors being harassed, false and misleading claims and punitive interest and fees applied during debt collection are some of the unacceptable practices that have been described. I am going to ensure we address the concerns that I have been hearing about lending practices that impact on vulnerable people.”

You can find more information on the review here.

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Perils Of Using PPPs To Meet Auckland’s Roading Needs

More than once, the coalition government has ruled out using public private partnerships (PPPs) to fund the country’s infrastructure needs in health and education – apparently private profiteering in those areas is recognised as being undesirable. Not the same story though with transport, and the reasons for that differential treatment are mystifying. Earlier today, Transport Minister Phil Twyford announced that one of two new roads that the government would be co-financing would be a PPP – namely, the Penlink project that will link the northern motorway to the Whangaparaoa Peninsula.



HiveMind: Fair Enough? How Should New Zealanders Be Taxed?

Have Your Say - Scoop and PEP invite you to share your issues, ideas and perspectives on the NZ tax system with other New Zealanders using Scoop’s HiveMind tool. This Tax HiveMind is intended to complement and feed into the review being run by the Government-appointed Tax Working Group (TWG), which is looking at the fairness, balance and structure of the tax system with a 10-year time horizon. More>>


Gordon Campbell: On Thompson + Clark & Russia’s World Cup

Daily, the coalition government keeps running into examples of the toxic legacy left behind by National – and just as regularly, even the simple fixes are proving stubbornly difficult to enact. Take the case of the security firm Thompson + Clark ... More>>


Gordon Campbell: On The GCSB’s Security Hang-Up With Russia

So our GCSB has chimed in, alongside its British, Australian and US allies, with warnings about a “fresh wave” of Russian cyber attacks, although the warning has been curiously framed. More>>


PM's Europe Trip: CHOGM & Bilateral Meetings

Prime Minister Jacinda Ardern is in Europe for the Commonwealth Heads of Government Meeting (CHOGM) in London and meetings with counterparts in Paris and Berlin. More>>


Addressing Climate Change: No New Offshore Exploration Permits

The Coalition Government is taking an important step to address climate change and create a clean, green and sustainable future for New Zealand, Prime Minister Jacinda Ardern announced today. More>>


Road Safety Summit: Actions To Improve Identified

The Local Government Road Safety Summit held last week identified actions that will lead to lasting changes to road safety in New Zealand, says Associate Transport Minister Julie Anne Genter. More>>





Featured InfoPages