Media Release

New Zealand Credit and Finance Institute

Friday August 17th

Education and Enforcement Key to Overcoming Exploitative Lending

Better enforcement of current legislation combined with education would help combat unethical lending practices according to the New Zealand Credit and Finance Institute (NZCFI).

The NZCFI’s president David Young said a report released today by the Ministry of Consumer Affairs on the experiences and behaviour of Pacific consumers highlighted the need for tougher enforcement of the Credit Contracts and Consumer Finance Act.

“The current legislation is fine but should be enforced more strictly. This would put a halt to the few cowboys who give professional financial service providers a bad name.

“Educating young people in secondary schools about the role of credit would also help future proof them against getting themselves into potentially dire financial situations,” he said.

Teaching young people how to prioritise their spending, understand terms and conditions of legally binding contracts and, the risks involved in borrowing money would make it less likely they accumulated bad debt and negative credit ratings in the future, he said.

“The NZCFI supports the Ministry’s review of the act but at the end of the day you can’t legislate against greed.  Personal responsibility also needs taken into account and goes beyond the realms of legislation.”

Mr Young said NZCFI members were keen to assist policy and law makers in their bid to tidy up the industry.

“The Institute recognises the importance of credit to the New Zealand economy but we don’t support individuals or organisations that knowingly get people into debt beyond their capability.

“Such practices are simply not acceptable and tarnish the reputation of everyone in the credit industry,” he says.

The New Zealand Credit and Finance Institute is recognised as an industry leader on matters relating to credit management and aims to support the professional development of its members through training and education programmes.

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