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Credit Contracts and Consumer Finance Act 2003

Enforcement and remedies - Orders, injunctions, and prohibited enforcement - Prohibited enforcement

99B: Enforcement prohibited if creditor unregistered

You could also call this:

"You can't make someone pay if you're not a registered lender."

Illustration for Credit Contracts and Consumer Finance Act 2003

If you are a creditor who needs to be registered under the Financial Service Providers (Registration and Dispute Resolution) Act 2008, you cannot enforce your rights if you are not registered. You cannot make someone pay the costs of borrowing if you are not registered. The debtor is not liable for the costs of borrowing while you are unregistered. However, this does not apply to fees or charges payable to another person, unless that person is associated with you. When you become registered, you can enforce your rights, but only after giving the debtor written notice. This notice must include information about your registration and the dispute resolution scheme you are a part of. The notice must tell the debtor they are liable for the costs of borrowing from the date of the notice. It must also say they are not liable for costs that would have accrued before the notice was given. You can only enforce your rights for costs that accrue after the notice is given. This is subject to other provisions of the Credit Contracts and Consumer Finance Act 2003 that may prohibit enforcement. You can find more information about the Financial Service Providers (Registration and Dispute Resolution) Act 2008 at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1109400.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6503343.

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Topics:
Money and consumer rights > Consumer protectionMoney and consumer rights > Banking and loans
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99A: Enforcement of rights of repossession, etc, prohibited, or

"Creditors can't take goods back if they didn't follow the rules."

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100: Enforcement of guarantee prohibited, or

"Guarantees can't be enforced if the law is broken, unless the court says it's fair"

Part 4Enforcement and remedies
Orders, injunctions, and prohibited enforcement: Prohibited enforcement

99BEnforcement prohibited if creditor unregistered

  1. If a creditor who is required to be registered under Part 2 of the Financial Service Providers (Registration and Dispute Resolution) Act 2008 is not registered under that Act,—

  2. neither the creditor nor any other person may, in relation to a consumer credit contract to which the creditor is a party,—
    1. enforce any right in relation to the costs of borrowing; or
      1. require the debtor or any other person to make a full prepayment or a part prepayment on the basis of a failure by the debtor or other person to pay the costs of borrowing; and
      2. neither the debtor nor any other person is liable for the costs of borrowing under such a contract in relation to any period during which the creditor is unregistered.

        1. However, subsection (1)(b) does not apply in relation to fees or charges payable to another person, body, or agency as referred to in section 45 unless that person, body, or agency is an associated person of the creditor.

        2. On becoming registered under the Financial Service Providers (Registration and Dispute Resolution) Act 2008, the creditor may enforce the creditor's rights in relation to the costs of borrowing, but only—

        3. if the creditor has given written notice to the debtor, containing the information specified in subsection (5); and
          1. in relation to the costs of borrowing directly attributable to periods after such notice has been given to the debtor.

            1. Subsection (3) is subject to any other provision of this Act that prohibits enforcement of the consumer credit contract.

            2. The notice required under subsection (3)(a) must clearly inform the debtor—

            3. that the creditor is now registered under the Financial Service Providers (Registration and Dispute Resolution) Act 2008; and
              1. of the date on which the creditor became registered; and
                1. of the name and contact details of the dispute resolution scheme of which the creditor is a member; and
                  1. that the debtor is, from the date on which the notice was given, liable for the costs of borrowing; and
                    1. that the debtor has no liability for the costs of borrowing that would otherwise have accrued before the date on which the notice was given.

                      Notes
                      • Section 99B: inserted, on , by section 65 of the Credit Contracts and Consumer Finance Amendment Act 2014 (2014 No 33).
                      • Section 99B(1)(a): amended, on , by section 31(1) of the Regulatory Systems (Economic Development) Amendment Act 2019 (2019 No 62).
                      • Section 99B(4): amended, on , by section 31(2) of the Regulatory Systems (Economic Development) Amendment Act 2019 (2019 No 62).