Foss Craig: Credit Contracts and Financial Services Law Reform Bill — In CommitteeText is incorporated into the Bound VolumeFoss Craig: Credit Contracts and Financial Services Law Reform Bill — In Committee[Sitting date: 13 May 2014. Volume:698;Page:17784. Text is incorporated into the Bound Volume.]Hon CRAIG FOSS (Minister of Consumer Affairs): It is a pleasure to continue speaking on this very very good bill the Credit Contracts and Financial Services Law Reform Bill. This once had cross-party support. I will be interested to see whether New Zealand First has come to its senses and will now be voting for the bill. We will wait and see.The member who spoke previously Carol Beaumont raised some interesting points. Part 2 really deals with the financial dispute resolution services even though she started to talk about some other matters that were in the earlier part. But she did raise a couple of points. It came out in a recent study that the awareness of dispute resolution schemes amongst the general public amongst users and even amongst suppliers actually was lower than desired. There is work going on by those various services and others to raise the profile of dispute resolution schemes because they do play a key part in consumer dispute resolution of course in the life cycle of a consumer credit contract.I just note that the bill deals with that kind of life cycle: the information disclosure the responsible principles that must be adhered to the stand-down period the signing of the contract and what can happen after that what can happen during the life of the contract if problems occur and of course what can happen if the borrower has some complaints or some issues. It is important to note I think that the financial dispute resolution services are paid for by the industry. They are very very low cost for the borrower or for the user. They are paid for for the good of the industry. As the member noted earlier if any entity that tries to engage in commercial ending activity is not a member of a dispute resolution scheme it cannot charge interest—it cannot charge interest. It is somewhat of a pretty good and sharp economic incentive for those organisations to belong to an accessible low-cost dispute resolution scheme that by and large does a very very good job. I agree that the awareness of them will increase.The member asked about the Commerce Commission’s information and the sending out of the changes and new obligations to the sector out there. I can assure the member as I did on Part 1 when I spoke that yes I have asked the Commerce Commission and it has assured me that it is taking this kind of new retail-facing part of its work very very seriously. It has already hired from the Māngere Budgeting Services Trust a person who is like a community liaison officer a community adviser. That is something that the Commerce Commission has never had before. As members noted in the previous part that adviser is on the ground gaining knowledge and raising awareness in community groups of what they can do if something goes wrong—such as talking to the financial dispute resolution services.This is a pretty confined part of this bill—clause 71 through to clause 90-odd I think. But there is just one quick point. There are some changes in the bill that the Financial Markets Authority can make changes to. Sadly—and this is why we have such complex legislation that goes across many pages as always—there are some people out there trying to exploit the holes in legislation. There have been some people within New Zealand and from afar who have tried to exploit the good reputation that New Zealand has as a fair and just place to do business backed up by robust regulation and a justice system that has integrity.Some of the changes in those clauses as you will note give powers to the Financial Markets Authority to deregister various people and to services to not accept registrations from particular individuals. Sadly some individuals with ulterior motives of essentially trying to rip New Zealanders and others off have actually tried to use thatstamp of approval of being a New Zealand financial services provider and belonging to one of these dispute resolution services and the procedures probably were not as good as they could have been as we have found out to disallow those people from exploiting New Zealand’s very very good name. It is very important that we maintain our reputation around the world as a good place to do business and domestically for New Zealanders—particularly for vulnerable New Zealanders but of course across the country.So this bill closes some of those opportunities that individuals could have used to exploit our regulatory environment for their own commercial gain where in fact they have no standing whatsoever to do that. As I said earlier often their motives were not good and they may have been convicted or have had actions taken against them in overseas jurisdictions and this part of the bill addresses those particular holes.