INDEPENDENT NEWS

Toll-free phone for buy-back concerns

Published: Tue 24 Jun 2003 03:54 PM
24 June 2003 Media Statement
Toll-free phone for buy-back concerns
Commerce Minister Lianne Dalziel and Consumer Affairs Minister Judith Tizard are investigating a possible amendment to the Consumer Credit Bill to provide legislative cover for housing buy-back schemes.
A meeting with officials was held yesterday to discuss the schemes. Consumer Affairs officials agreed that buy-back schemes could be subject to legislation and the Consumer Credit Bill, currently before the Commerce Select Committee, presented the most immediate way forward.
The meeting follows the government’s move on Friday to place eight finance and property companies under statutory management.
“These are not the only companies involved. We are aware of other companies implicated in schemes where consumers have intended to refinance their mortgage to combine all their debts in one loan, and have instead signed over the title to their home without being informed of the consequences of doing so.
“People need to come forward to help us determine the extent of problems with these schemes. Today we are announcing a toll-free phone line for people to register their concerns with the Ministry of Consumer Affairs,” Lianne Dalziel said.
Judith Tizard issued a warning to consumers about entering into buy-back schemes.
“People have entered into these schemes without realising what they have signed up for. They can be given dubious advice, often by the same people acting for the companies, that the schemes are the only option to settle debts but often, this is not the case at all.
“No one should sign over their home to raise money to pay debt. If consumers do understand the scheme – and I doubt that many would, given the complexity of some we have seen - it is highly unlikely they will ever be able to buy their home back, because the schemes appear to be designed to ensure that they can’t.
“Consumers who have entered into one of these schemes, or are contemplating it, should urgently seek independent legal advice - don’t rely on the advice you may have received from a lawyer acting for these companies,” Judith Tizard said.
Lianne Dalziel said she would continue to monitor progress as the Auckland District Law Society investigated complaints about the involvement of some of its members, in these schemes.
“It is essential that people seek independent advice for all transactions involving property,” she said.
Freephone:
0508 468 732
(0508 HOUSEBUYBACK)

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