Media Releases

22 June 2004

Housing buy-back schemes Update

In the eight months since the passage of the Credit Contracts and Consumer Finance Act 2003 it appears that the emergence of new housing buy-back schemes appear to have been halted," says Consumer Affairs Minister Judith Tizard. 

Housing buy-back schemes have resulted in many innocent homeowners losing their homes through the actions of unscrupulous creditors.  Last year, recognising the magnitude of the problem, the government took quick action by placing eight companies involved in housing buy-back schemes under statutory management."

As a result of this action some homeowners have been helped.  The statutory manager has reported to the Minister of Commerce that of 20 properties released from statutory management, nine of the former owners have repurchased their properties and six more are in negotiations to purchase the property. 

We then took action to stop the development of new schemes," said Judith Tizard. 

The Credit Contracts and Consumer Finance Act contains measures that protect consumers against further losses from buy-back schemes and provides remedies for those already involved in such schemes.  This includes giving enforcement responsibility to the Commerce Commission."

The Ministry of Consumer Affairs continues to monitor the situation. They are also taking an active role in disseminating information to vulnerable communities about buy-back schemes and other schemes that are potentially harmful to consumers.

I am proud to be part of a Labour Progressive government that has shown such strong leadership in its handling of this issue," said Judith Tizard.