Our guide to your rights around repossession.
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Sometimes when you borrow money, the lender requires the loan be "secured". This means if you default on the loan, the lender can repossess and sell a specified item of yours to recover the debt. Secured loans include hire purchase deals (the security is the item you bought on HP) or personal loans secured by one of your possessions.
Certain goods cannot be used for security. This includes beds and bedding, cooking equipment, medical equipment, portable heaters, washing machines, refrigerators, travel and identification documents, and bank cards.
The lender can insist you have a "guarantor". This is someone who agrees to repay the loan if you cannot.
If you stop repaying a loan and the guarantor does not take over the repayments, the lender can repossess the security and sell it to recover the debt. The repossession process is covered by the Credit Contracts and Consumer Finance Act 2003. Repossession agents must be licensed under the Private Security Personnel and Private Investigators Act 2010.
Before repossession the following rules apply:
The following apply when goods are being repossessed:
When selling the goods, the lender:
If you believe your lender has breached this Act, talk to them. If you remain dissatisfied, you can make a complaint to a financial dispute resolution scheme.
Your lender must tell you which scheme they have joined. You can also check details on the Financial Service Providers Register on the Companies Office website.
Lenders must belong to 1 of the following 4 schemes:
You can also make a complaint to the Commerce Commission, which enforces the Credit Contracts and Consumer Finance Act.
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