FSF publishes debt guidelines
The Financial Services Federation (FSF) has launched its responsible debt collection code.
The guidelines formalise its members’ commitment to ethical standards of practices that go beyond what’s required of them by legislation.
“The code has been proudly developed by our affiliate and full members that carry out debt-collection activities to spell out how they commit to treating consumer debtors in a responsible manner,” says Lyn McMorran, pictured, executive director of the FSF.
“The members have agreed to abide by the code. They understand that if they fail to do so, this could result in the FSF taking disciplinary action against them including having their membership of the FSF revoked.”
The release of the federation’s responsible debt collection code has been welcomed by the government.
Duncan Webb, Minster of Commerce and Consumer Affairs, says: “Codes like this are a useful addition and supplement to the law – people collecting on loan defaults are already prohibited from acting in ways which are oppressive, harsh or unconscionable, and must comply with reasonable standards of commercial practice.
“It’s good to see the industry take steps to improve practices and set the standard for proper commercial practice. Preventing unconscionable and misleading practices by debt collectors is important, especially as many debtors will be in vulnerable circumstances or suffering real hardship.
“The move to closer co-operation between FSF members and financial mentors, as envisaged in the code, is a good initiative to further protect consumers from predatory debt collection practices.”
FSF members agree with the consumer advocacy and financial mentoring sector that unsafe practices being used against mentors’ clients when consumer debt is being collected are unacceptable and not the way in which FSF members behave in their dealings with debtors.
This led to them developing the code to spell out the minimum standard of responsible behaviour expected from FSF members in their debt collection activities.
Through the responsible debt collection code, they agree to limit the contact they have with debtors to certain hours of the day, including not making face-to-face contact on Sundays – unless by prior arrangement with the consumer – and only when there’s a genuine purpose for them to make such contact.
FSF’s debt collection members will, if the debtor prefers, work with a financial mentor or an authorised representative appointed by the debtor with an appropriate privacy waiver in place.
The code also outlines where members of the public can go to make a complaint about the debt collector’s activity in need.
It will be made available publicly on FSF members’ websites and will be distributed through the financial mentor networks of FinCap, the national umbrella organisation for financial mentors in New Zealand.
The code was launched at a ceremony in Wellington on October 10 attended by FSF members, political party candidates, and representatives from financial dispute resolution schemes and other financial services sector associations. Click here to access it.
