Money lenders and mobile traders like truck shops must be certified from 1 October or face penalties of up to $600,000.
Money lending businesses are being warned they must take a proactive approach over new certification rules. Photo: 123RF
Commerce Commission chair Anna Rawlings said directors and managers would need to satisfy authorities that they were financially sound, honest, reputable and competent to do their jobs, to get certified.
The exceptions are those businesses who are licensed or registered by the Financial Markets Authority or Reserve Bank of New Zealand.
Lenders providing consumer credit and mobile traders selling on credit that are already registered as a Financial Service Provider (FSP) on 1 October do not need to be certified until they complete their next annual FSP confirmation.
The commission is advising lenders that they should apply for certification at least two months before 1 October.
Rawlings said all organisations that sold goods or services on deferred payment terms should check whether they needed to comply.
"We are aware that some organisations provide consumer credit that might not see themselves as typical lenders. This is a good time for all organisations who might be providing consumer credit or relevant mobile trading services to check their obligations including whether they need to be registered and certified.
"Businesses must take a proactive approach to certification and ask themselves: could this apply to me?"
Lending without being certified could result in penalties of up to $600,000 for a company or $200,000 for an individual.
The government has introduced a range of changes to the Credit Contracts and Consumer Finance Act 2003 which come into effect in stages between December 2019 and October 2021. The websites of the Ministry of Business, Innovation and Employment and the Commerce Commission have more details.