Consumer Guarantees Act Review

Creditors of consumer goods will be disappointed to hear the Economic Development, Science and Innovation Committee has recommended that the Consumer Guarantees (Removal of Unrelated Party Lender Responsibility) Amendment Bill should not proceed. 

This recommendation means that creditors who fall within the definition of "supplier" under the Consumer Guarantees Act 1993 (CGA) will remain liable to consumers if the consumer goods they finance do not meet the statutory guarantees as to quality and fitness for purpose.

This liability has been a long standing issue for creditors who believe their skill and specialty is in finance, and not in the supply or manufacture of the goods.  Creditors have always questioned why they should be responsible to the consumer for defects in goods when they have little or no influence on their supply. 

The Consumer Guarantees (Removal of Unrelated Party Lender Responsibility) Amendment Bill sought to narrow the circumstances in which creditors would be responsible for meeting the consumer guarantees to situations where the creditor and the retailer were related parties in terms of New Zealand Accounting Standard NZ IAS 24.  This would have limited obligations to creditors that are in the same corporate group as a retailer, or that establish joint ventures with retailers.  But unfortunately for creditors of consumer goods the proposed changes were not accepted, so it is business as usual. 

We would love to hear from creditors who were not aware of their obligations to consumers under the CGA, or who would like more information about them.  There are some measures creditors can take to manage the extent of their exposure under the CGA, and we can help them through this process.

If you need help with CGA compliance issues, we are here to assist.   Call Nic on 09 489 0715 or email her at