Survey results emphasise importance of borrowers knowing their rights
Only one in five respondents of a new survey was aware that consumers can pull out of original loans if a better deal shows up within five working days, according to the Ministry of Business Innovation and Employment (MBIE).
That led Mark Hollingsworth, national manager at MBIE, to emphasise the importance of borrowers knowing their rights, as prescribed in the Credit Contrasts and Consumer Finance Act of 2003 (CCCFA).
Read more: How will increase in mortgage rates impact new borrowers?
Almost half of respondents to MBIE’s 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.
However, the survey found that one out of three respondents has never even heard of the CCCFA.
Additionally, data showed that those who are not familiar with the legislation tend to come from families (45%), are aged 18 to 26 (43%), and live in Auckland (35%).
Hollingsworth said that those who have a “robust knowledge of the CCCFA” can transact with more confidence.
“This week is Money Week so it’s a timely reminder for people to brush up on what they can and can’t do,” said Hollingsworth. “The findings of our survey offer us a chance to target information to consumers to help them avoid problem debt.”
