Variation in the Consumer Credit Contract - New Zealand

[cerberusalert]

Under the Credit Contracts and Consumer Finance Act (CCCF Act), a debtor has the right in certain circumstances to ask for a variation in their consumer credit contract on the grounds of hardship.

 

A debtor may, under the CCCF Act, seek changes to a contract when:

 

≥≥ they suffer an unforeseen hardship (including illness and injury, the end of a relationship or loss of employment); and

≥≥ they cannot reasonably meet their contractual obligations because of that hardship; and

≥≥ they reasonably expect to be able to meet their obligations were the contract to be varied; and

≥≥ they are not, at the time they apply, in default of their financial obligations under the contract and their account is not at the time over its credit limit.

 

If a creditor turns down the debtor’s application, the debtor may ask the court to order one of the above variations. The court may also make any other order it sees fit, stay any enforcement action or make other orders until the application is decided.

 

The debtor must apply to change the contract in one of the following ways:

 

≥≥ extending the term of the contract and reducing the amount of each payment;

≥≥ postponing the due dates of payments; and

≥≥ extending the term of the contract and postponing for a specified period the dates on which payments are due.

 

These changes cannot result in any consequential change to the annual interest rate/s.

 

LENDERS AND borrowers

 

The CCCF Act uses a number of different terms to describe lenders and borrowers, depending on the nature of the transaction.

 

≥≥ Consumer credit contracts – creditors and debtors.

≥≥ Consumer leases – lessors and lessees.

≥≥ Buy back transactions – transferees and occupiers.

 

For the purposes of these fact sheets the terms creditor and debtor are used when referring generally to credit transactions, but the specific terms are used where relevant.

 

A debtor may, under the CCCF Act, seek changes to a contract when they are not, at the time they apply, in default of their financial obligations under the contract and their account is not at the time over its credit limit.

Edited July 3, 2011 by cerberusalert

[cerberusalert]

The Credit Contracts and Consumer Finance Act 2003 (CCCF Act) applies to four kinds of transaction: credit contracts, consumer credit contracts, consumer leases and buy-back transactions of land.

 

http://www.comcom.govt.nz/transactions-covered-under-the-cccf-act/

 

 

 

The Credit Contracts and Consumer Finance Act 2003 (CCCF Act)

http://www.legislation.govt.nz/act/public/2003/0052/latest/DLM211512.html

Edited July 3, 2011 by cerberusalert

[cerberusalert]

Consumer Law: Fair Debt Collection FAQ

 

Q: Can a debt collector contact anyone else about your debt?

A: If you have an attorney, the debt collector must contact the attorney instead of you. If you don't have an attorney, a collector may contact other people, but only to find out where you live, what your phone number is, and where you work. Collectors usually are prohibited from contacting such third parties more than once. In most cases, the collector may not tell anyone other than you and your attorney that you owe money.

 

Q: Can a debt collector continue to contact you if you believe you do not owe money?

A: A collector may not contact you if, within 30 days after you receive the written notice, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.

 

Q: Can you stop a debt collector from contacting you?

A: You can stop a debt collector from contacting you by writing a letter to the collector telling them to stop. Once the collector receives your letter, they may not contact you again except to say there will be no further contact, or to notify you that the debt collector or the creditor intends to take some specific action.

 

Sending such a letter to a collector doesn't make the debt go away if you actually owe it, though. You could still be sued by the debt collector or your original creditor.

 

Q: How may a debt collector contact you?

A: A collector may contact you in person, by mail, telephone, telegram or fax. But a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts.

 

Q: What can you do if you believe a debt collector violated the law?

A: You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, you may recover money for the damages you suffered plus an additional amount up to $1,000. Court costs and attorney's fees can also be recovered. A group of people may also sue a debt collector and recover money for damages up to $500,000, or one percent of the collector's net worth, whichever is less.

 

Q: What control do you have over payment of debts?

A: If you owe more than one debt, any payment you make must be applied to the debt you indicate. A debt collector may not apply a payment to any debt you believe you do not owe.

 

Q: What debts are covered under the Fair Debt Collection Practices Act?

A: Personal, family, and household debts are covered under the Act. This includes money owed for the purchase of an automobile, for medical care or for charge accounts.

 

Q: What must the debt collector tell you about the debt?

A: Within five days after you're first contacted, the collector must send you a written notice telling you the amount of money you owe, the name of the creditor to whom you owe the money and what action to take if you believe you do not owe the money.

 

Q: What types of debt collection practices are prohibited?

A: Harassment

 

Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, debt collectors may not:

Use threats of violence or harm

Publish a list of consumers who refuse to pay their debts (except to a credit bureau)

Use obscene or profane language

Repeatedly use the telephone to annoy someone

 

False statements

 

Debt collectors may not use any false or misleading statements when collecting a debt. For example, debt collectors may not:

Falsely imply that they are attorneys or government representatives

Falsely imply that you have committed a crime

Falsely represent that they operate or work for a credit bureau

Misrepresent the amount of your debt

Indicate that papers being sent to you are legal forms when they are not

Indicate that papers being sent to you are not legal forms when they are

 

Debt collectors also may not state that:

You will be arrested if you do not pay your debt

They will seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so

Actions, such as a lawsuit, will be taken against you, when such action legally may not be taken, or when they do not intend to take such action

 

Debt collectors may not:

Give false credit information about you to anyone, including a credit bureau

Send you anything that looks like an official document from a court or government agency when it is not

Use a false name

 

Unfair practices

 

Debt collectors may not engage in unfair practices when they try to collect a debt. For example, collectors may not:

Collect any amount greater than your debt, unless your state law permits such a charge

Deposit a post-dated check prematurely

Use deception to make you accept collect calls or pay for telegrams

Take or threaten to take your property unless this can be done legally

Contact you by postcard

 

Q: Where can you report a debt collector for an alleged violation?

A: Report any problems you have with a debt collector to your state Attorney General's office and the Federal Trade Commission. Many states have their own debt collection laws, and your Attorney General's office can help you determine your rights.

 

Q: Who is a debt collector?

A: A debt collector is any person who regularly collects debts owed to others. This includes attorneys who collect debts on a regular basis.

Edited July 3, 2011 by cerberusalert

[cerberusalert]

Fair Debt Collection Practices Act Summary

 

For those not familiar, The Fair Debt Collection Practices Act (FDCPA) basically offers protection against any illegal and unethical debt recovery tactics. The laws enlisted under The Fair Debt Collection Practices Act help the consumers to understand their rights better and also learn how to manage their illegal and unethical debt recovery situations.

 

The FDCPA are a set of laws and guidelines, regulated by the Federal Trade Commission (FTC) for both debtors as well as the debt collectors. It clearly states what the debt collectors and debtors can do and also what they cannot do. It is actually a guideline for states laws for the legal issues and professionals such as attorneys. Though many states have their distinct set of rules and regulations when it comes to debt collection, the rules of this act are more or less uniformly applicable through out the United States of America. However most of the state laws are quite similar to that of The Fair Debt Collection Practices Act.

 

In case you are wondering, which matters these laws are likely to be applicable, the FDCPA actually applies to family, personal, and household debts, which also include aspects like medical care, automobile debt, first and second mortgages, credit card debts and retail financing. Most of the states which have their own laws regarding debt collection have similar laws as that of the FDCPA. The Fair Debt Collection Practices Act helps consumers in becoming aware of our rights and the misconduct that are sometimes a part of debt collection agencies' strategies.

 

The code of conduct to be maintained by the debt collectors as well as the lawyers and solicitors are listed in The Fair Debt Collection Practices Act. Some of the laws are stated hereunder:

Any kind of threat given to the consumer for delinquencies and at the same time threatening to lower down the credit rating and repossession without actually taking any legal steps. You as a consumer should be aware that a debt collector may warn you about the legal steps to impending debt collection but the agency cannot give a false threat to anyone.

 

 

A debt collector cannot call the debtor’s relatives, neighbors, or any other person known to him. Although the debt collector has the right to call on the co- applicant of the debt.

 

 

The debt collector cannot call up a debtor at unreasonable hours or cannot make repeated calls to him, if asked to desist in writing. The debt collector has to call up the debtor between 8:00 am and 9:00pm. In case the debtor himself permits the collector any other time other than the specified, then he may utilize that time.

 

 

The debtor cannot place any calls at inconvenient places like the debtor's workplace, unless permission is given otherwise. In case the debtor has requested from not calling at a particular place, then such wishes should be respected.

 

 

Using racial slurs, obscenity or insults is strictly prohibited by law.

 

 

 

There are various other regulations that should be maintained about which we should be aware. The Fair Debt Collection Practices Act makes it easier for most debtors to pay off their debts while restricting the debt collectors from doing anything insulting or unethical.

 

If you feel you are being unlawfully harassed by debt collectors with phone calls and/or letters that may be associated with threats or violence, then you may want contact and report the issue to The New Zealand Commerce Department with your complaint at ( http://www.comcom.govt.nz/Inquiries/contactus.aspx ) so they may further assist you with this matter.

Edited July 3, 2011 by cerberusalert

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