Since late 2011 the Commission’s focus under the CCCF Act has been on lower tier lenders (fringe lenders). The work programme has included checks on 58 fringe lenders in South Auckland, Waikato and the Bay of Plenty, which resulted in formal warnings to six lenders. This work supports the Government’s goal of raising levels of financial literacy within communities, and aligns with key points arising out of the Financial Summit held in August 2011.
Recently we analysed complaints data for the period from June 2010 to May 2012, looked at proposed legislative changes, and considered similar credit issues arising in Australia and the UK. The result of this analysis will drive our ongoing compliance advocacy programme, and ensure we are focusing on the rights areas of the sector and on the right issues.
During the period we looked at, the majority of complaints were about personal loan providers, followed by car finance providers and gyms. (We gave the gym industry advice in August 2011 about the need for most of their membership contracts to comply with the CCCF Act.)
During the same period we saw a drop in the number of complaints about bank credit cards, pre-payment fees (including home loan break fees) and default fees. At the same time we saw an increase in complaints about hardship. Our fact sheet on Consumer rights under a consumer credit contract - hardship provides more information about when a borrower may be able to apply for changes to a consumer credit contract because they are facing hardship.
Over the next year the Commission will continue to focus on increasing lenders' compliance with the CCCF Act. We will also continue our focus on lower tier lenders.
As part of our ongoing drive to educate both lenders and borrowers about the CCCF Act we have just published a large number of new plain English fact sheets, and a handy overview brochure, which we are disseminating widely to borrowers and translating into a number of languages for non-English speakers.
You can read the new fact sheets on our Consumer Credit Fact Sheets page.
