Money   travel hero default

Commerce Commission vs Baycorp

A settlement between the Commerce Commission and Baycorp warns creditors to pay closer attention to their obligations under the Credit (Repossession) Act.


Choose what’s right for you with confidence

Join today and get instant access to all test results and research.

The Commerce Commission has investigated whether Baycorp, a debt-collection company, was in breach of the Fair Trading Act when it added collection costs, plus some legal and court costs and interest, to a debtor’s balance after the items used as security had been repossessed and sold.

The commission found that Baycorp couldn’t do this: Section 35 of the Credit (Repossession) Act prohibits a creditor from recovering any more than what’s still owed after the creditor has received money from selling items.

As a result of the settlement, Baycorp has agreed to reduce outstanding debtor account balances by nearly $3.5 million and pay $46,107 to debtors who had overpaid. Baycorp has also agreed to change its debt-collection practices to prevent this happening in the future.

Commerce Commission Chairman Dr Mark Berry is concerned that companies involved in lending, repossession and debt collection don’t fully understand their obligations under the Credit (Repossession) Act. He says the settlement is a signal that there are severe consequences if they get it wrong.

More from