Catchpole Brent: Credit Contracts and Consumer Finance Bill — In Committee 
Catchpole Brent: Credit Contracts and Consumer Finance Bill — In Committee 
[Volume:611;Page:8708] 
BRENT CATCHPOLE (NZ First) 
: 
 First of all I would like to pick up on the required disclosure standards. The initial disclosure requirement is set out clearly in clause 15 but in the clauses dealing with continual disclosure there is a provision that they will be removed if there are no variations. We heard a number of submitters who wanted to see the removal of continual disclosure if there were no variations but to me a change in interest rates is a variation. I think if an interest rate is changed because the Reserve Bank has changed its interest rate it is a variation to the interest rate being charged. Therefore people need to look very closely at that provision and treat it with caution. If that variation is not being disclosed during the process or at a later stage when the interest rates rise the debtor is at a disadvantage. 
I would like to touch on clause 24 “Right to cancel consumer credit contract”. This clause contains the phrase “within 3 working days”. Members can imagine that 3 days is a long time. For example a student can buy a stereo on Saturday morning rev it up for a party on Saturday night and take it back on Monday morning saying: “I want to cancel the contract.” That is a rather bizarre example but it was one that was raised at the Commerce Committee. Even more bizarre might be the other example that was given to us at the committee of somebody taking home a bed sleeping in it for 1 night and then taking it back. Nobody would want to buy that bed after that. One could consider those 3 days to be an awfully long time. 
I would like to raise the issue of the fees. The Minister in the chair Judith Tizard has stated that commissions are not counted. I ask her whether she was saying that commissions are not counted in this legislation. The Minister is not saying that. I am pleased about that. Clause 40 “Fees or charges passed on by creditor” is about the that are charged by the agents that negotiate the contracts. There is a provision that the fees do not have to be disclosed but the creditor cannot collect more than the amount being passed on to the agent. But if the fee is not disclosed how does the debtor know how much is being charged and how much is being passed on? It would be very difficult for the debtor to work that out if it is not being disclosed. 
I will be disappointed if the Minister does not have another look at this. If the debtor has no knowledge of that amount the creditor could be collecting a percentage over and above for the service. That would be totally against the intent of the bill. I would like to hear the Minister’s comments because I am sure she was saying that commissions are not counted in the whole contract because they are being passed on to somebody else. If fees are not being disclosed then we have a serious problem. 
The debtor has the right to repay the full amount but it is not clear to me whether there is a huge service fee included in that repayment. I would like to see the bill tightened up in that area because I believe it does allow commissions on that service fee.