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Credit Contracts and Consumer Finance Act 2003

Repossession of consumer goods under consumer credit contract - Rules that apply before repossession

83J: Effect of debtor's complaint or application on grounds of unforeseen hardship on creditor's rights to enforce credit contract

You could also call this:

"What happens to the creditor's rights if you complain about unfair treatment"

Illustration for Credit Contracts and Consumer Finance Act 2003

If you make a complaint to your creditor about how they are treating you, they cannot take any action against you until your complaint is resolved. You can make a complaint if you think the creditor is being unfair, or you can make an application under section 55 and the creditor must wait until this is decided. If the creditor has already started taking action against you, they must stop until your complaint is resolved or your application is decided. If you have consumer goods that are at risk, the creditor can repossess them, but they cannot take any further action against you. The creditor must tell you their position on your complaint and give you details of their dispute resolution scheme. You can refer your complaint to this scheme, and if you do not, the creditor can take action against you after 14 days. The creditor can take action against you once your complaint is resolved, or if you do not refer your complaint to the dispute resolution scheme. Enforcement action means the creditor can give you a repossession warning notice, repossess your goods, sell them, or try to recover any money you owe. The creditor can only take certain actions if the person responsible for the dispute resolution scheme thinks it is in your best interests, and you and the creditor agree in writing. This includes actions under subpart 5 and sections 83ZI(1)​(d) and 83ZM.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6501350.

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Topics:
Money and consumer rights > Consumer protectionMoney and consumer rights > Banking and loans
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83I: Rules relating to accessions (goods that are installed in, or affixed to, other goods), or

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Part 3ARepossession of consumer goods under consumer credit contract
Rules that apply before repossession

83JEffect of debtor's complaint or application on grounds of unforeseen hardship on creditor's rights to enforce credit contract

  1. Neither a creditor nor a creditor's agent may take any enforcement action in relation to consumer goods (whether under this Part or in accordance with a credit contract) if the debtor has made—

  2. a written complaint to the creditor in relation to any enforcement action and that complaint has not been resolved; or
    1. an application to the creditor under section 55 and that application has not been decided.

      1. If the creditor or creditor's agent has already commenced any enforcement action before a written complaint in relation to that enforcement action or any other enforcement action is made, or an application under section 55 is made, to the creditor, no further action may be taken to continue or complete that enforcement action until the complaint has been resolved or the application has been decided.

      2. However, despite subsections (1) and (2), if the relevant consumer goods are at risk (see section 83E(2)), the creditor may repossess the goods but must not take any further enforcement action.

      3. If the creditor and debtor have not reached agreement and settled the complaint referred to in subsection (1)(a) or (2), the creditor may provide the debtor with a written notice that—

      4. specifies the creditor's position on the complaint; and
        1. states that the notice has been provided for the purposes of this subsection; and
          1. states that the debtor may refer the complaint to the creditor's dispute resolution scheme; and
            1. contains the name and contact details of that scheme; and
              1. states that the complaint will be treated as resolved for the purposes of this section if the debtor does not refer the complaint to that scheme within 14 days of the notice being provided (and, accordingly, the creditor may take or continue enforcement action in relation to the consumer goods).

                1. For the purposes of this section, a complaint is resolved when—

                2. the creditor and debtor have reached agreement and settled the complaint; or
                  1. the complaint has been—
                    1. referred to the dispute resolution scheme of which the creditor is a member; and
                      1. resolved or otherwise determined in accordance with the scheme's rules (including where the scheme ceases considering the complaint for any reason); or
                      2. if the creditor has provided the debtor with the written notice referred to in subsection (4),—
                        1. 14 days have elapsed since the debtor was provided with the notice; and
                          1. the debtor has not, within that period, referred the complaint to the dispute resolution scheme.

                          2. In this Part, enforcement action means any of the following:

                          3. giving a repossession warning notice:
                            1. repossessing, or entering premises for the purpose of repossessing, consumer goods over which there is a security interest:
                              1. selling, offering for sale, or disposing of the consumer goods that have been repossessed:
                                1. any action to recover any amount owing by the debtor to the creditor under the credit contract after the consumer goods are sold under subpart 5 (see sections 83ZI(1)(d) and 83ZM).

                                  1. In this section, an application under section 55 is decided when the creditor gives written notice of the creditor's decision under section 57A(1)(c)(ii).

                                  2. To avoid doubt, the creditor or the creditor's agent may, subject to this Part, to any court order, and to any terms on which the complaint was resolved, take, or continue, the enforcement action referred to in subsection (1) or (2) from the time that the complaint has been resolved or (in the case of an unsuccessful application under section 55) the application has been decided.

                                  3. Despite subsections (1) and (2), the creditor may take an enforcement action referred to in subsection (6)(a) to (c) (but not an action referred to in subsection (6)(d)) if—

                                  4. the person responsible for the dispute resolution scheme to which a complaint has been referred under this section has given notice (which may include a preliminary view) to the effect that the enforcement action would be in the best interests of the debtor; and
                                    1. the debtor and the creditor have agreed in writing to the enforcement action.

                                      Notes
                                      • Section 83J: inserted, on , by section 51 of the Credit Contracts and Consumer Finance Amendment Act 2014 (2014 No 33).
                                      • Section 83J(9): inserted, on , by section 28 of the Credit Contracts Legislation Amendment Act 2019 (2019 No 81).