Is it true that repo men, and women, can take anything of value from the property of people with bad debts? I read recently that the children of bad debtors have even had their toys confiscated and sold up. I was appalled. I thought that repo firms could only repossess the goods that money was owed on.
No, sadly, they can take much more than that, but it all depends on the loan contract. Most loans secure only the goods being purchased. But some nasty loan contracts permit a repo firm to take anything from the defaulter’s home, up to the value of the debt, plus costs. Under these contracts, some unscrupulous and heartless repo firms have been known to take anything at all – including kids’ toys – that might have a resale value.
It is appalling, I agree. But then, so is walking out with old folks’ heating. Fortunately, the laws around repossessions are currently being reviewed. It’s hoped that new laws will list a range of household goods that cannot be repossessed – essential items such as bedding, heaters, cooking gear and kids’ toys. It’s also hoped that loan contracts will have to spell out much more clearly if chattels, apart from what is being purchased, can subsequently be repossessed.
Regulations around repos have been inadequate for decades, which isn’t to say that defaulting debtors aren’t often to blame, but let’s hope new laws will help those most desperate in the community, including a growing number of financially illiterate.
Do you have a consumer question for Kevin? Email [email protected], or post to Weekly Consumer, PO Box 90119, Victoria St West, Auckland 1142.
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