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Your rights as a guarantor

Right to key information about the guarantee and the credit contract

Credit Contracts and Consumer Finance Act 2003, ss 24, 25

If you agree to be a guarantor for a borrower, the lender must give you the following information before you give the guarantee:

The lender must also provide you with certain information if you make a written request for it – for example, the amount required for full payment at any date, or details of any changes made to the contract, or a copy of the contract. The lender has 15 working days to give you the information (or until 15 working days after you pay any reasonable fee charged by the lender, if this is later).

Sometimes guarantors also agree to guarantee any future debts that the borrower incurs with the lender. If the lender does later agree to lend the borrower more money to which the guarantee applies, the lender must inform the guarantor of this within five working days.

Right to be notified of contract changes

Credit Contracts and Consumer Finance Act 2003, s 26

The lender must give you, the guarantor, full written details of any changes to the credit contract that either increase the borrower’s obligations or shorten the amount of time the borrower has to pay the debt. The lender must give you this information within five working days after the change.

Repossession of goods from the borrower or guarantor

Credit Contracts and Consumer Finance Act 2003, ss 83G, 83V

If you as a guarantor have put up some of your property as security for the borrower’s debt, there’s a strict process the lender must follow if the borrower doesn’t make their payments and the lender wants to take your property (“repossess” it) to cover the debt. This includes first having to give you a “repossession warning notice” (see “Repossession” in this chapter).

If the lender repossesses property from the borrower (that is, either hire-purchase goods or property that the borrower has put up as security for a loan), you the guarantor must also be sent the notices that are sent to the borrower.

What can the guarantor do if the contract is unfair?

Credit Contracts and Consumer Finance Act 2003, ss 117–131

The courts can change the terms of a credit contract if the contract is “oppressive”, which means “harsh, unjustly burdensome, unconscionable, or in breach of reasonable standards of commercial practice”. If the credit contract also requires a guarantee, the guarantee is treated as forming part of the credit contract, and so the guarantee can be changed too.

The judge can also change or strike out the terms of the guarantee if you were pressured into signing it by oppressive means, or if it would be harsh and oppressive to enforce the guarantee against you. For information about challenging unfair contracts and guarantees, see “Challenging an unfair credit contract” in this chapter.

How the “responsible lending principles” protect guarantors

Credit Contracts and Consumer Finance Act 2003, s 9C(2), (4); Credit Contracts and Consumer Finance Act 2003, ss 93, 96

Lenders have certain responsibilities towards you if you give a guarantee for a consumer credit contract. These are similar to the responsibilities owed to borrowers.

The central responsibility is that, before a lender takes a guarantee from you, and in all their later dealings with you in relation to the guarantee, the lender must exercise the care, diligence and skill of a responsible lender. The lender also has these specific responsibilities:

  • Checking out your ability to fulfil the guarantee – Before you give the guarantee, the lender must make reasonable enquiries so that they’re satisfied you’ll be able to fulfil the guarantee without suffering substantial hardship. The lender is entitled to rely on the information you give them unless they have reasonable grounds to believe it’s not reliable.
  • Helping you reach an informed decision – The lender must help you to reach an informed decision about whether to give the guarantee and to be reasonably aware of the guarantee’s full implications. As part of this responsibility, the lender must make sure that any information they give you isn’t likely to be misleading, deceptive or confusing, and that the terms of the guarantee are written in plain language and are clear, concise and understandable.
  • Reasonable, ethical treatment – The lender must treat you reasonably and ethically at all times, including when problems arise, such as the borrower missing their payments.
  • No oppressive terms or conduct – The lender must make sure that the guarantee isn’t oppressive, that they don’t exercise any of their rights or powers under the guarantee in an oppressive way and that they don’t pressure you by oppressive means into giving the guarantee.
  • Meeting all legal obligations – The lender must meet all their legal obligations to you, including, for example, the requirements in the Credit Contracts and Consumer Finance Act to provide you with necessary information.

If a lender breaches any of those responsibilities, the courts can order them to pay you compensation, or can make various other orders (see “Enforcing the credit contract laws against lenders” in this chapter).

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Credit and debt

Where to go for more support

Community Law


Your local Community Law Centre can provide free initial legal advice and information.

Consumer Protection


Consumer Protection helpline: 0508 426 678 (0508 4 CONSUMER)

Email: cpinfo@mbie.govt.nz

The Consumer Protection website has useful information on a range of consumer topics. Consumer Protection is part of the Ministry of Business, Innovation and Employment (MBIE).



Phone: 0800 345 123

Email: help@moneytalks.co.nz

MoneyTalks provides free, confidential budgeting support. They can pair you with a financial mentor to help you if you are struggling with debt or need advice on budgeting.



Phone: 0800 345 123

Email: kiaora@fincap.org.nz

FinCap can help you with budgeting information online or on the phone. They may also suggest a local budgeting service to help you with debt and other budgeting issues.

Consumer NZ


Phone: 0800 266 786

Email: info@consumer.org.nz

The Consumer NZ website provides a wide range of information on consumer credit and debt issues, including debt collectors, repossession and bankruptcy

Commerce Commission


Phone: 0800 943 600
Email: contact@comcom.govt.nz
The Commerce Commission enforces the consumer credit legislation (the Credit Contracts and Consumer Finance Act) and the laws against misleading and deceptive conduct by traders (the Fair Trading Act). The Commission provides information on these areas on its website.

It’s All Good


It’s All Good is an animated series produced by The Commerce Commission about consumer rights.

Citizens Advice


Phone: 0800 FOR CAB (0800 367 222)
Citizens Advice Bureaux have volunteers trained in consumer law who can provide information and advice if you have a problem with credit and debt issues.

Dispute resolution schemes

There are four dispute resolution schemes for consumers dealing with lenders and other credit providers.

  • Financial Services Complaints Limited – www.fscl.org.nz
    0800 347 257
  • Email: info@fscl.org.nz
  • Insurance & Financial Services Ombudsman –
    Phone: 0800 888 202
  • Email: info@ifso.nz
  • Banking Ombudsman – www.bankomb.org.nz
    0800 805 950
  • Email: help@bankomb.org.nz
  • Financial Dispute Resolution – www.fdrs.org.nz Phone: 0508 337 337
  • Email: enquiries@fdrs.org.nz

Cases in the District Courts

The Ministry of Justice

The Ministry of Justice website has information about civil claims in the District Courts: see www.justice.govt.nz and search “Claims you can take to civil court”.

Credit reporting

Privacy Commission

0800 803 909

The Privacy Commission has information on your rights in relation to credit reporting and how to complain if you feel your rights have been breached.

Your credit record

Three credit reporting companies operate nationally in New Zealand. To check your record or correct any information, you’ll need to contact them all.

You’re entitled to a free copy of your credit record. You should make sure you choose the free option when you contact each company.

Centrix – www.centrix.co.nz 0800 236 874

Illion – www.illion.co.nz 0800 733 707

Equifax – www.equifax.co.nz 0800 698 332

Personal Properties Securities Register (PPSR)


Search the PPSR register to see if there is any security interest registered against a vehicle. This can be done for a small fee by registering to check online.

Bankruptcy and other options

Insolvency and Trustee Service


Phone: 0508 INSOLVENCY (0508 467 658)

The Insolvency and Trustee Service (ITS) deals with bankruptcies, no-asset procedures, summary instalment orders and some company liquidations. Information about those processes is available on its website. The ITS is part of the Ministry of Business, Innovation and Employment (MBIE).

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