Work on reviewing New Zealand's outdated credit laws is on track for changes to be considered by Government next year, Consumer Affairs Minister Phillida Bunkle said today.

The Ministry of Consumer Affairs has released the fourth of five discussion papers, on New Zealand consumer credit laws. The latest paper, titled Miscelleneous Issues discusses:
 making credit-related insurance provisions fairer for consumers
 creating an environment where credit can be safely and reliably obtained over the Internet
 helping consumers avoid getting into debt which they cannot pay off.

"Lenders too often compel consumers to buy insurance which is overpriced, is inappropriate in the circumstances or that doubles up on existing contents cover," Ms Bunkle said. “This allows lenders to increase the real cost of the credit at the expense of the consumer.

"This paper proposes better consumer protection for consumers entering credit deals where the lender requires insurance.

"As Minister I recognise that consumers should have some insurance cover but all the circumstances about the deal should be fair. In particular I'm concerned that consumers be able to choose their own insurer and understand what they are paying for."

The paper also supports allowing lenders to give credit electronically, but with safeguards. "Many of the issues around this will be debated through the Electronic Transactions Bill later this year."

The Minister also has concerns about people who borrow and then have trouble making repayments. "Debt is often the key factor in the poverty trap. Unmanageable debt puts people into poverty and it keeps them there. While credit law has a limited role, some legislative changes could help people stay clear of crippling debt and the cycle of despair that goes with it.

"These are issues I hope people and lenders think about as we look to bring New Zealand's credit laws into the year 2000. At the moment they are too outdated and deal insufficiently with detriment."

Submissions on the latest paper close 1 December 2000.

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