If you take out a loan and find a better deal within five working days, you can cancel your original loan, yet a recent consumer survey shows only one in five people know this.
Almost half of respondents to the 2020 New Zealand Consumer Survey took out a loan, bank overdraft, or other hire purchase agreement to pay something off in the past two years.
Mark Hollingsworth, National Manager, Consumer Protection at the Ministry of Business, Innovation and Employment (MBIE) says some knowledge of the Credit Contracts and Consumer Finance Act 2003 (CCCFA) is vital, to ensure people understand their rights when they borrow money or buy something on credit.
“This week is Money Week so it’s a timely reminder for people to brush up on what they can and can’t do. The findings of our survey offer us a chance to target information to consumers to help them avoid problem debt,” Mr. Hollingsworth said.
The 2020 New Zealand Consumer Survey (NZCS) also showed about one in three people had not even heard of the CCCFA, with a small number also unaware of the Consumer Guarantees Act 1993 (5%) and the Fair Trading Act 1986 (6%).
People most likely to have never heard of the CCCFA are families (45%), those aged 18-26 (43%) or 27-36 years (36%); women (32%); and people living in Auckland (35%).
Those most likely to have entered into a credit contract include: those aged 27-46 years (55%); Pacific consumers (57%); those with an annual household income over $100,000 (53%); Māori consumers (54%); and those in paid employment (51%).
“In today’s increasingly dynamic and evolving consumer finance and credit marketplace, and given the steady rate and diverse range of people entering into credit contracts, it’s important people have a robust knowledge of the CCCFA and are fully equipped to transact with confidence,” Mr Hollingsworth says.
“Our research helps enable us to report on emerging trends, so we can identify key population groups who most need advice and guidance, and ensure interventions are targeted to where they’re needed most.”
The Consumer Protection website offers a range of resources and information to help consumers understand their rights, including the “Shopping for a loan” fact sheet, available here.
