Debt recovery and enforcement

Use of disabling devices on goods

Restrictions on lenders using car starter interrupters or other disabling devices

Credit Contracts and Consumer Finance Act 2003, ss 83M, 83ZN(1)

Some credit contracts allow the lender to attach a disabling device to goods that are subject to a security interest under the contract, so that the lender can then disable the goods remotely if the borrower gets behind on their payments. For example, the disabling device could be a starter interrupt device with a GPS locator that’s attached to a car bought on hire purchase.

However, lenders can’t attach disabling devices to the following types of goods: beds and bedding, stoves and other cooking equipment, medical equipment, portable heaters, washing machines and fridges.

Restrictions on when lenders can activate disabling devices

Credit Contracts and Consumer Finance Act 2003, s 83L

A lender can’t activate a disabling device unless:

  • you’ve breached the contract in a way that, according to the terms of the contract, gives the lender the right to activate the device, and
  • the lender has given you reasonable advance notice that they will activate the device, and has told you what you can do to avoid this.

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