When a towing service repossesses a vehicle from an unattended property the driver must leave a copy of their vehicle recovery service licence or vehicle recovery endorsement in a prominent place.

From 19 August 2016 when a towing service repossesses a vehicle from an unattended property the driver must leave a copy of their vehicle recovery service licence or vehicle recovery endorsement in a prominent place.

This is in addition to the other information currently required to be left at the premises, and the other applicable requirements under the Credit Contracts and Consumer Finance Act 2003. If the towing service does not comply then both the towing service and the creditor may be liable for penalties or damages under the Act.
 


Who does this apply to?

This new requirement applies to creditors and towing services, when creditors use towing services to repossess vehicles on their behalf. For example, a person has defaulted on a car loan, and a creditor uses a towing service to repossess the car.

It applies if a towing service:

  • repossesses a vehicle AND
  • enters a person’s premises for the purpose of repossessing the vehicle AND
  • the occupier of the premises is not present (e.g. the person who lives at the house is not home).

In addition, it only applies where:

  • the driver holds a vehicle recovery service licence or vehicle recovery endorsement, but does not hold a repossession agent licence or certificate of approval issued by the Ministry of Justice under the Private Security Personnel and Private Investigators Act 2010 AND
  • there is a security interest in the vehicle, and the vehicle has been used or acquired mainly for personal, domestic, or household purposes (i.e. it does not apply where the vehicle is used mainly for business purposes).

When does it apply from?

The new requirement comes into effect on 19 August 2016.


What do I have to do?

The towing service driver must leave a copy of the vehicle recovery service licence or vehicle recovery endorsement in a prominent place. Creditors must ensure that this occurs.

This is in addition to the other documents that are currently required to be left at the premises under section 83P of the Credit Contracts and Consumer Finance Act 2003, such as a notice specifying that the premises have been entered, the date of entry, and an inventory of any consumer goods that have been repossessed.

There are a range of other requirements applying to repossessions under the Credit Contracts and Consumer Finance Act 2003. For more information, see the Commerce Commission’s repossession guidelines(external link).


What happens if the towing service fails to leave a copy of the licence or endorsement?

If a copy of the vehicle recovery service licence or vehicle recovery endorsement is not left in a prominent place with the other required documents when the occupier is not home:

  • The towing service will be in breach of section 83P of the Credit Contracts and Consumer Finance Act 2003. Breaching 83P is an offence with a fine of up to $200,000 (for an individual) or $600,000 for a body corporate (such as a company).
  • The creditor and the towing service may be liable to pay statutory damages to the borrower.
  • The creditor and agents of the creditor (including the towing service) may also be subject to court proceedings (brought by the Commerce Commission or the borrower) relating to any loss or damage from the breach.

The creditor and the towing service will also be in breach of the Act if the towing service does not hold a vehicle recovery service licence or vehicle recovery endorsement at all (and also does not hold a repossession agent licence or certificate of approval issued by the Ministry of Justice under the Private Security Personnel and Private Investigators Act 2010).


Background

On 6 June 2015 a new regulatory regime for consumer credit came into force. This included new protections for people who had goods repossessed under credit contracts. Creditors or their agents who repossessed consumer goods are now required to be licensed by the Ministry of Justice under the Private Security Personnel and Private Investigators Act 2010 and to meet a number of other requirements under Part 3A of the Credit Contracts and Consumer Finance Act 2003.

On 19 February 2015 an exemption was granted to holders of vehicle recovery service licences and vehicle recovery endorsements from the need to hold repossession agent licences or certificates of approval under the Private Security Personnel and Private Investigators Act 2010. This exemption is provided in regulation 18B of the Credit Contracts and Consumer Finance Regulations 2004.

However, from 19 August 2016 a new condition applying to this exemption comes into force. This is the requirement detailed in this notice. This is provided by regulation 5 of the Credit Contracts and Consumer Finance Amendment Regulations 2016. This condition is intended as a substitute for the usual requirement in section 83P(2)(c) and 83O(1)(c) to leave a copy of the creditor’s or creditor’s agent’s licence, or certificate of approval under the Private Security Personnel and Private Investigators Act 2010.


 

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