Credit Repossession Laws under Review

MEDIA RELEASE 18 July 2011 Hon Sir Grant Hammond KNZM

President

Law Commission

Embargoed until 18 July 2011, at 12 noon

Credit Repossession Laws under Review

The Law Commission is seeking public feedback on New Zealand’s credit repossession laws – the rules that apply when consumers default on a credit contract.

Among the questions the Commission is asking the public to consider is whether there should be a ban on the repossession of certain basic items, such as children’s belongings and medical necessities; and whether the law should more clearly state that the taking of other items is prohibited, such as passports and eftpos cards.

The Commission is working alongside the Ministry of Consumer Affairs, reviewing the Credit (Repossession) Act 1997. This is part of the wider review of consumer credit law announced by Commerce and Consumer Affairs Minister Hon Simon Power last month.

Lead Commissioner on the review, Professor Geoff McLay, said there were fears the law was not working, and vulnerable people were being exploited.

“A number of people have told us about examples of cases of alleged exploitation and oppressive behaviour, particularly in South Auckland and amongst Pacific communities,” Professor McLay said.

However, he also said there was difficulty obtaining evidence about the nature and size of the problems.

“The problem is hard to quantify, because repossession is a civil matter. There is no central oversight, and few if any statistics.”

The Commission is therefore seeking information about whether problems are being experienced with the current Act, if so, what kind of problems, and views on how the Act might be reformed, to offer everyone a law that is more certain and more effective.

“We are keen to hear from people who have either suffered, or know of others who have suffered, harassment and oppression,” said Professor McLay. “We are also asking lenders how well the law works for them. We want views from everyone on how the law can be made better.”

should be contractually conferred, or dealt with in the Act;

• the fitness of a credit provider should be assessed, or their financial services registration affected, by misconduct when they repossess goods;

• there should be oversight and enforcement by the Commerce Commission or another body;

• the Credit (Repossession) Act should be incorporated into the Credit Contracts and Consumer Finance Act, which is being reviewed by the Ministry of Consumer Affairs.

The closing date for submissions is 19 August 2011.

The paper is available on the Law Commission’s website: www.lawcom.govt.nz.

The Commissioner responsible for the project is Professor Geoff McLay.

The email address for submissions is creditrepo@lawcom.govt.nz.

ends

© Scoop Media