Credit Contracts and Consumer Finance Act 2003

Repossession of consumer goods under consumer credit contract - Disabling devices

83L: Use of disabling device

You could also call this:

"What happens if a lender uses a device to stop you using something you bought"

Illustration for Credit Contracts and Consumer Finance Act 2003

If you have a consumer credit contract, the creditor might have a security interest over the goods you bought. The creditor can have a right to activate a disabling device on these goods. A disabling device is a device that can stop you from using the goods or limit how you use them. You need to breach the contract first, and the creditor must give you notice before activating the device. The notice must tell you that the device will be activated and what you can do to stop it. The device can be activated if it prevents you from using the goods, limits your use, helps the creditor find the goods, or gives the creditor another benefit. The creditor or their agent cannot activate the device unless you have breached the contract and they have given you notice. You can find more information about this in section 83M. The device can be used to stop you from using the goods or to help the creditor find them.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6501356.

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83M: Connection or use of disabling device in connection with certain goods prohibited, or

"No contract can allow someone to add a device that stops goods from working."

Part 3ARepossession of consumer goods under consumer credit contract
Disabling devices

83LUse of disabling device

  1. This section applies where a consumer credit contract provides that the creditor—

  2. has a security interest over consumer goods to which a disabling device is connected; and
    1. has a right to activate the disabling device.
      1. Neither a creditor nor a creditor's agent may activate a disabling device unless—

      2. there has been a breach of the consumer credit contract by the debtor that is sufficient, according to the terms of the contract, to give rise to the creditor’s right to activate the disabling device; and
        1. the creditor or the creditor's agent has given the debtor reasonable notice, in advance of the activation,—
          1. that the disabling device is to be activated; and
            1. about what action the debtor may take to prevent the disabling device being activated.
            2. In this section and section 83M,—

              activated, in relation to a disabling device, means that the disabling function of the device has been switched on, with the result that—

              1. the debtor is prevented from using the consumer goods; or
                1. the debtor's use of the consumer goods is limited; or
                  1. the creditor is able to locate the consumer goods; or
                    1. the creditor is able to achieve any other similar outcome that is of a direct or indirect benefit to the creditor in relation to the relevant consumer credit contract

                      disabling device means a device that is attached to consumer goods, the functions of which, when activated, include 1 or more of the following:

                      1. preventing the consumer goods from being used:
                        1. limiting the debtor's use of the consumer goods:
                          1. enabling the creditor to locate the consumer goods:
                            1. achieving any other similar outcome that is of direct or indirect benefit to the creditor in relation to the relevant consumer credit contract.

                            Notes
                            • Section 83L: inserted, on , by section 51 of the Credit Contracts and Consumer Finance Amendment Act 2014 (2014 No 33).
                            • Section 83L(1): amended, on , by section 27 of the Regulatory Systems (Economic Development) Amendment Act 2019 (2019 No 62).
                            • Section 83L(2)(a): amended, on , by section 27 of the Regulatory Systems (Economic Development) Amendment Act 2019 (2019 No 62).
                            • Section 83L(3) activated paragraph (d): amended, on , by section 27 of the Regulatory Systems (Economic Development) Amendment Act 2019 (2019 No 62).
                            • Section 83L(3) disabling device paragraph (d): amended, on , by section 27 of the Regulatory Systems (Economic Development) Amendment Act 2019 (2019 No 62).