Credit repossession: Enforcement
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| Q.16 Does there need to be enforcement of compliance with the Credit (Repossession) Act by an agency such as the Commerce Commission? Is there the right balance between creditor and debtor rights in the Credit (Repossession) Act? Should a creditor be required to seek an order from an independent authority or warranted officer before commencing a repossession? Do there need to be more penalties to ensure compliance with the Credit (Repossession) Act entry onto premises and repossession notice provisions? |
There was broad support for appropriate enforcement of the Credit (Repossession) Act. For the lending industry this appeared to be on the basis that the law was satisfactory and the issues were about its operation. For consumer groups, this was seen as a way to deal with the issues that arise during the repossession process.
Lenders expressed views that the balance of rights between lenders and borrowers was sufficient. Consumer representatives felt the law was weighted heavily in favour of the lender. A submission from the legal profession suggested that introducing strong penalties for failing to comply with the Credit (Repossession) Act would improve the balance. This same submission noted the need for a more thorough evaluation of the principles of the Act.
Consumer representatives generally supported a third party deciding if a repossession was able to be carried out. The lending industry was generally against this. The reasoning was that often goods are ‘at risk' (e.g. goods may be hidden) and repossession agents need to be able to take quick action to protect the security and felt that a third party would hinder this process.
