Christians Against Poverty has revealed the disturbing and sometimes illegal tactics money lenders and debt collectors
use to recoup debts from often vulnerable households.
Tactics highlighted by Christians Against Poverty in a report recently delivered to government include:Turning up on doorsteps dressed to resemble police officers or court officials, including wearing earpieces, radios and
stab-proof vests in order to create intimidation and fear.Threatening to remove all household items, have the person arrested by police, and/or publish their photo in a
newspaper.Harassing people at their place of work and asking employers directly to make payments from wages—often sending
documentation designed to resemble official court attachment orders.Directly contacting family members and disclosing private and personal information about the debtor.Sending automated phone calls from a private number multiple times a day.Installing vehicle immobilisers in cars and remotely disabling cars if repayments are missed.Confusing, exorbitant and ambiguous fees and financial statements.
Christians Against Poverty’s Social Policy Adviser, Michael Ward, says Christians Against Poverty sees first-hand the
damage this behaviour causes in people’s lives.
“By the time people call us they’re distraught, living in constant fear and experiencing poor emotional and mental
health. Family relationships are often strained or broken, and they’ve almost always been pushed into further financial
hardship.”
Ward says lenders and the external debt collection agencies they use tend to treat vulnerable households especially
harshly.
“Aggressive debt collection practices are designed to intimidate and exhaust people into unsustainable payment
arrangements. People experiencing financial hardship often don’t have the confidence or energy to negotiate a fair and
reasonable arrangement in the face of such behaviour, and are less likely to complain to the authorities.
“In our experience, debt collectors tend to exploit this fact and push them even harder than usual. This is wrong, and
it must stop. If people are to take personal responsibility for repaying their debts, lenders and debt collectors must
take personal responsibility for the way they treat their clients.”
He says Christians Against Poverty believes there would be better outcomes “across the board” if lenders and debt
collectors treated clients with a higher level of care.
“We know from experience that empathetic and understanding negotiation between lenders and clients leads to increased
debt repayments as well as better emotional and mental health outcomes—a win for everyone.”
He says Christians Against Poverty are hoping for constructive talks with government around this issue, and are hoping
to engage constructively with lenders as well.
“Christians Against Poverty commends the positive changes the government has made to the Credit Contracts and Consumer
Finance Legislation (CCCFA), but we believe further changes are needed to ensure dodgy debt collection practices are
prevented. We see these practices every day, and they only serve to make hardship worse for people.
“Although there exists some regulation around what should constitute reasonable behaviour for debt recovery in Aotearoa
New Zealand, gaps in the guidelines have allowed these types of behaviours to continue.”
Among Christians Against Poverty’s recommendations are:Make undue harassment a criminal offence—in line with Australian regulations—and provide more clarity around what
constitutes harassment in the Fair Trading Act.License debt collectors in New Zealand.Prevent court orders from being attached to benefits, and make it easier for debtors to vary court attachment orders .Provide guidance for lenders around legitimate contact e.g. contacting people within normal hours and not at their
workplace, and respecting privacy.Create guidelines for lenders around fees, establishing affordable repayment plans, and next steps if debtors genuinely
cannot afford to repayCreate guidelines for debtors to dispute charges, and access dispute resolutions and advocacy services.
“If we all work together—lenders, communities, churches and government—borrowers won’t have to live in constant fear and
we can make this special place we call home, a better home for everyone,” says Ward.
Christians Against Poverty is a non-profit organisation that helping to release New Zealanders from poverty and
unmanageable debt by providing free services in partnership with 150 churches across Aotearoa New Zealand. Watch how CAP’s debt help service works here.
For free help, or to support the work of Christians Against Poverty, call 0508 227 111 or visit capnz.org.About Christians Against Poverty
Christians Against Poverty (CAP) is a non-profit organisation helping to release New Zealanders from poverty and
unmanageable debt. Our debt-help service and money management courses, run in partnership with 150 churches across
Aotearoa, are free for everyone and anyone. Since Christians Against Poverty began in 2008, thousands of people have
reclaimed control over their finances, gone completely debt-free, and report leading new lives of freedom and hope. Watch how CAP’s debt help service works here.Api’s* story
Api’s experiences with debt collectors has left a sour taste in her mouth. Api is a busy mum, working full time to
support her three young children and her spouse studying at university. While she has a good income from her job in
senior leadership, a lack of budgeting meant she resorted to taking out loans with finance companies to get by. Access
to credit was easy, as were debt consolidation loans. This would however become the beginning of their steep journey to
rock bottom.
On top of all the debt, they did not have the headspace to budget well. Trying to repay the debts left very little for
the family.
“We just couldn’t do anything as a family because we were restricted due to our financial capability at that time. We
were making quite a bit of money, but most of it was going on paying the debts and we didn’t have enough for ourselves
and to buy [food] to feed our kids.
The impact placed a heavy burden on her marriage. She recalled getting into frequent arguments with her husband due to
their complex financial situation with the feeling of stress, anxiety, and pressure palpable in their homes. This was
only the tip of the iceberg as the finance company secured Api’s loan against essential items, including beds, cooking
equipment and a washing machine. They had threatened to advertise her photo in any newspaper and repossess her
properties if she failed to meet her repayment commitments.
Api felt overwhelmed by the several phone calls that bombarded her daily, including her workplace – breaching her
privacy, letting her colleagues at work know she had taken out a loan with their company and leaving her humiliated.
“I used to get calls left, right and centre. If I happened to be behind just one payment and stuff, they just wouldn’t
stop calling, ringing.”
This was beside the additional fees charged for each visit which were added to her debt balances, and letters sent to
her workplace or home address – which she described as “really unfair,” and harrowing. Rock bottom for her was when debt
collectors made unaffordable deductions from her income using attachment orders from the court – a situation she found
difficult to vary.
But from the very first time they reached out to CAP for help, they felt love and no sense of judgement. CAP has worked
with Api and her husband to stick with a budget and to negotiate a repayment plan for her creditors. Her home life for
her whanau has also improved because of the changes.
“We’re not struggling, there’s always food on the table, lunches for my kids... We’re not arguing over financial issues
and problems.... We’re in a good place... We’re happy.”
The family are now able to do things together which they couldn’t afford before. They no longer take out new debt or
even consider the option. Together with CAP they have repaid around 60% of their debt and are on a journey to go
debt-free in 15 months.
“All the anxiety or the stress and stuff from debt collectors...we don’t have that anymore.”
*Name changed to protect identity.
Nina’s* story (Nina is available for interview but doesn’t wish for her real name or image to be used).
For Nina*, a single mother of two children, full of life and energy, her experience with debt collectors has been
nothing close to pleasant. Nina’s debt grew as a result of ongoing health problems and the struggle of raising two young
kids alone and solely depending on government assistance.
“I feel like I got stuck using the card all the time when I’d try to get something.”
As her debt increased over the years, so did her frustrations and struggles. She reported feeling trapped and hamstrung
into taking out more loans to survive. This marked the beginning of her ordeals with debt collectors. It started with
incessant phone calls at odd hours that threatened and harassed her and the kids. The calls were frequent, harsh,
condescending and often followed by unrealistic demands for repayments.
“They try to talk to me like I'm a kid and I'm not a kid.”
Nina felt overloaded by the countless emails, letters, phone, and court orders – a feeling she admitted made her
emotionally drained, distressed and prioritizing debt repayments over essentials like food and rent
The experience that startled her the most was one when the debt collector came banging on her door dressed in a
chequered jacket with a bullet-proof appearance that resembled the Police. They had an ear-piece in and a walkie talkie.
“They act like they're cops but they're not.”
Fearing the worst, and disconcerted by the feeling of trouble, she answered the door only to find out the person was
from a debt collector agency. She felt frightened, terrified and intimidated. Looking back, Nina describes the
experience as one intended to misrepresent authority to coerce borrowers to yield to creditor’s repayment demands.
“They'll say, "Well, I'm sorry, you're just going to have to pay this."
Her friends and whānau were not insulated from undue harassment. She remembers a debt collector once chased a friend who
had visited her down the street. That made her feel unsafe and troubled.
On her part, she had tried to negotiate with creditors to prevent her repayments from affecting her ability to buy
groceries, pay utilities and provide heating for her kids.
“A lot of them will say, "Oh, you can't give less than $20 or less than $30. I'll say, “I'm sorry, I'm on a benefit and
I have two kids to feed, so you will get what I can give you.”
Some of the creditors did show some understanding, she recalled, but their repayment demands did not take heed of her
financial circumstances. Nina’s was shocked when despite being with Work and Income, debt collectors applied for a court
order to have her debts deducted from her benefit.
“All they did was just put it through the court and then they signed off on it and then attached it to my benefits.”
Not only was she not given the opportunity to be involved in the decision on what amount to be deducted, she was
stonewalled when applying for an adjustment order for the deductions.
“It's quite annoying. You know, the paperwork and then they give you the run-around… That’s why by the end of it,
everyone's like "Oh, forget it. Just take it out then."
Once CAP started to advocate for Nina - negotiating with creditors so she could repay debt in a sustainable way - her
family and friends noticed a difference; she was less worried and a much happier person. “It’s helping loads.”
She no longer receives regular harassing phone calls and visits.
She suggests in future, “maybe some of those debt collectors could be trained a bit more on how to handle people” so
that others are treated with the respect they deserve.
Nina is on her way to becoming debt-free in 18 months.
Name changed to protect identity.