Credit contracts: Hire purchase, loans and other credit

Other legal protections when you get credit

Automatic guarantees (Consumer Guarantees Act)

Consumer Guarantees Act 1993, ss 2, 21-38

Consumer credit contracts come under the definition of “services” under the Consumer Guarantees Act 1993, and therefore lenders must comply with the relevant guarantees under this Act (see “Automatic guarantees when buying from a business” in the “Consumer protection” chapter).

Protection against misleading conduct (Fair Trading Act)

Fair Trading Act 1986, ss 9-16

Lenders must comply with the Fair Trading Act 1986 and therefore aren’t allowed to mislead or deceive debtors about loans and their rights related to them (see “Protections against misleading or unfair trading” in the “Consumer protection” chapter).

Financial service providers – Dispute-resolution schemes

Financial Service Providers (Registration and Dispute Resolution) Act 2008, ss 11, 47, 48, 63(1)(k)

All lenders must be registered as financial service providers and be members of an approved dispute-resolution scheme.

These dispute-resolution schemes are intended to be accessible, independent, fair, accountable, efficient and effective for consumers. The schemes can deal with problems with:

  • the services, advice or products you’ve received from a lender or from another type of financial service provider such as a financial adviser
  • the conduct of any financial service provider
  • a financial service provider’s breach of a legal obligation, of an industry code of conduct or of their contract with you.

How do I complain?

Financial Service Providers (Registration and Dispute Resolution) Act 2008, s 63(1)(c)

Dispute resolution is available to any individual consumer and to any small organisation (that is, one with fewer than 20 full-time equivalent employees).

You’ll first need to make a complaint to the lender to give them a chance to address the issue. For the next steps, check with the lender’s dispute-resolution scheme. You can find out which scheme they belong to by:

  • asking the lender (or other provider)
  • asking any one of the dispute-resolution schemes
  • checking on the Financial Service Provider Register (at www.business.govt.nz/fsp ).

(For information about the four dispute-resolution schemes in New Zealand, see “Other resources” at the end of this chapter.)

How are complaints resolved?

Each dispute-resolution scheme has its own process for handling complaints. These services are all independent and the process is always confidential.

There are many kinds of settlement outcomes available, including monetary compensation (but this is not always given).

If your complaint isn’t resolved by the dispute-resolution scheme, you can take it to the Disputes Tribunal (see the chapter “The Disputes Tribunal”) or the courts.

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