BILL BEFORE HOUSE Extensive Changes In Hire-Purchase Law

Press, Volume CX, Issue 32379, 19 August 1970, Page 14

BILL BEFORE HOUSE Extensive Changes In Hire-Purchase Law

(New Zealand Preet Association) WELLINGTON, August 18. A new code for hire-purchase agreements is contained in legislation introduced in Parliament today.

The Hire Purchase Bill, to come into effect on April 1,1971, was introduced by the Minister of Justice (Mr Riddiford) and will replace the existing Hire Purchase Agreements Act, 1939. The bill makes extensive changes in the law relating to hire purchase, and is wider in its scope than the existing legislation. It stems directly from the report by the Tariff and Development Board—set up in 1964 and which made its final report in 1968—into instalment credit trading in New Zealand.

The report confirmed the need for up-to-date hire-pur-chase legislation, but left a number of issues for further study. The report was examined by the Justice Department A bill was then drafted and studied, and then revised into the form now before the House.

The bill applies to all hirepurchase agreements—except in the field of car leasingirrespective of the value of an article, and irrespective of whether it is bought for private use or in connection with, a business.

But it exempts from the definition “hire - purchase agreement” any agreement made otherwise than at retail.

Requirements The seller, under a hirepurchase agreement, to be able to enforce the agreement, must comply with a number of requirements. These are that the agreement shall:

Be in writing. Be signed personally by the

purchaser. Contain a description of the

goods. Specify the number of instalments, the date each is payable, the full name and address of the vendor, the financial details of the transaction, and the rights of the purchaser. The requirements relating to financial details does not apply to agreements involving more than $4OOO. REBATES Agreements (except for those involving a cash price of more than $10,000) must contain a statement concerning rebates for early completion of the agreement. Where the cash price of the goods involved in an agreement is more than $5O, the “true” interest rate must be detailed and be correct tn within 1 per cent This clause will come into effect on a date to be appointed. Hire purchase agreements may be varied under conditions specified by the legislation.

The quality of the goods under agreement becomes definable for the protection of the buyer in the case of new goods, and of the seller in the case of second-hand goods. Other protective provisions for both parties are detailed. On the question of rebates for early payment of an agreement, the bill provides means of calculating this. A rebate amounting to less than $1 does not require payment

Before repossession can take place for default under the agreement, a notice must be served giving 10 days’ grace to remedy the fault, and the application made to a Magistrate's Court INSURANCE Among miscellaneous clauses are provision preventing vendors from stipulating conditions of insurance of the goods on the buyer. Fines for disposing of goods covered by an agreement are raised from a maximum of $lOO to $5OO. Maximum imprisonment remains at three months.

General penalties also carry a maximum $5OO fine. The provisions of the bill will not apply to agreements entered into before April 1 next year. “The aim of this bill is to reconcile as far as possible the interests of retailers, those who finance them, and consumers,” Mr Riddiford said.

“It is designed to interfere as little as possible with

proper business practices while protecting the consumer against the abuses and sharp dealing that undoubtedly occur in a few cases. “It is designed to inform the customer as fully and as fairly as practicable what he is agreeing to when he buys an article on hire purchase, and what it is costing him.” IMPROVEMENT The new legislation would be a substantial improvement in the law governing an important field of modern commerce. The instalment credit trading report estimated that in 1968 about sl7om was involved in hire purchase agreements. In reply to a question relating to car leasing, Mr Riddiford said the Government “is still considering how best to deal with this particular abuse.” The bill was given a first reading, second reading pro forma, and referred to the Statutes Revision Committee.