Franks Stephen: Credit Contracts and Consumer Finance Bill — In Committee 
Franks Stephen: Credit Contracts and Consumer Finance Bill — In Committee 
[Volume:611;Page:8848] 
STEPHEN FRANKS (ACT NZ) 
: 
 United Future common-sense policy is: “We will save when we are told what money costs us.” People will save when it is worth saving. When we have a Government that for 45 years has been telling us it is OK to live beyond our means and that we will live off the savings of poor people. The Taiwanese have become twice as rich as us by lending us money. We will keep spending money for as long as our Government keeps pretending we will never have to pay it back.  
But getting back to this bill I am a little bit baffled by a completely unexplained change in the schedules. Schedule 3 “Assumptions” has been completely deleted and there is no reference in the Commerce Committee report as to why. There may be someone here who was on the select committee who can explain it. But given that it was not explained and that schedule 3 was a major part of the bill in that its intent was to simplify the form of disclosure—with statutory assumptions—I am genuinely baffled about why it has gone. 
 I am also curious about the form of schedule 1 “Key information concerning consumer credit contract” and in particular the right to cancel. Paragraph (s) prescribes a statement to the consumer about his or her cancellation rights that does not seem to fit the head clause—clause 15. The cancellation right in that paragraph states that notice must be given within a certain period and the cash price must be paid within 15 days but it does not state when the property has to be given back. I wonder whether that is deliberate or an oversight. The head clause states that the property should be given back in 3 days but the notice which is the only thing most consumers will ever see does not tell them when the property has to go back. At the very least some poor soul will think that some bush lawyer will read it and decide to push his or her luck and of course cause cost to the lender. Very very easily he could assume and argue that the notice would have told him when he had to give back the property. Certainly it tells consumers when they have to pay the cash price. In fact as a reasonable person I might think that I had to pay the cash price and give back the property within 15 days. Of course people will know that quite a lot of property deteriorates considerably as time passes. If it was a consignment of plants from a garden shop it may well be that the plants had died before they went back. 
Sandra Goudie 
: A used bed. 
STEPHEN FRANKS 
: I am not sure about that. Another little puzzle here is that this does not seem to apply if possession has been taken of the goods. I am not sure why that is but using the garden shop example one could easily pay for a whole garden full of plants and not pick them up—intend to pay for them later. Of course the garden shop ought to try to keep them alive but theoretically at least it is not its problem once a person has bought them. Maybe the person has not taken possession—the carrier has them—and there is an argument because whose carrier it is has never been prescribed. There are a whole lot of situations where this could be an issue and it puzzles me that this form of disclosure is set out in full in schedule 1 where it will be hard to change. Then the regulation-making power states that if anything is forgotten extra disclosure can be added—maybe that can be used. But it does not state that the prescribed form can be changed. I think that is just a bit of clumsy work. 
I do not know the quality of the advice from the ministry or from the officials who have advised on this legislation but anything from the Ministry of Consumer Affairs has to be deeply suspect. It has no intellectual rigour in the way in which it approaches consumer protection. It does not believe in markets. I suspect that this is simple incompetence. The confusion that will result for consumers is that those well-meaning people who always purport to act in the interests of consumers are in fact acting against them. 
Finally in looking at the schedules I find that there is another small puzzle. If the Minister in the chair would take a call that puzzle might be explained very easily. The prescribed information for the standard form of consumer credit contract is in great detail.