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Deposit Takers Act 2023

Depositor compensation scheme - Miscellaneous provisions - No holding out that product is protected deposit

258: Offence to hold out that product is protected deposit

You could also call this:

"Don't falsely claim a financial product is a protected deposit to trick people."

Illustration for Deposit Takers Act 2023

If you issue a financial product or are associated with someone who does, you must not say that the product is a protected deposit if it is not. You also must not say that the person who holds the product is entitled to compensation under this law if they are not. If you do say these things and you know they are not true, or you do not care if they are true, you are committing an offence. You can get in trouble with the law if you commit this offence, and you might have to pay a fine or even go to prison, depending on who you are and what you did.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS507774.

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Part 6Depositor compensation scheme
Miscellaneous provisions: No holding out that product is protected deposit

258Offence to hold out that product is protected deposit

  1. An issuer of a financial product or an associated person of the issuer must not, directly or indirectly, hold out that—

  2. the financial product is a protected deposit if that is not the case; or
    1. a holder of the financial product is entitled to compensation under this Part if that is not the case.

      1. A person commits an offence if they—

      2. contravene subsection (1); and
        1. know that, or are reckless as to whether, what they are holding out is not the case.

          1. A person that commits an offence against this section is liable on conviction,—

          2. in the case of an individual, to imprisonment for a term not exceeding 1 year or to a fine not exceeding $100,000 (or both):
            1. in any other case, to a fine not exceeding $2,500,000.