New law to bite hard on errant loan sharks
Loan sharks will be harshly punished for targeting vulnerable people under a proposed law change.
A reform of loan laws was launched in Porirua last week by consumer affairs minister Chris Tremain, who has since been replaced in the role by Simon Bridges.
It would make it illegal for money lenders to give loans to people who would clearly struggle to pay it back. Fines for taking advantage of the needy would be $100,000 for an individual or $300,000 for a company.
Lenders will need to be more clear about the terms of a loan and will not be able to repossess essential household items if the borrower defaults.
‘‘ We don’t think lenders should be able to knock on your door and take anything they want because you defaulted on a $200 loan,’’ Mr Tremain said.
Huge amounts of people struggle to pay back loans issued by ‘‘unscrupulous and irresponsible’’ lenders, Mr Tremain said.