Business owners who sell goods on credit with a right of repossession in the event of default are obliged to comply with the Credit (Repossession) Act 1997.
One important section of this Act is section 35 which prohibits a lender from recovering more than the debt balance outstanding after goods have been repossessed and sold.
What this means is that after you have repossessed and sold a vehicle (or the goods you held security over) and you still have an outstanding balance owing, no further penalties (interest, collection costs etc) can be added to the remaining balance.
Possibly a lack of awareness of this section caused a large debt collection company (not CollectIT) to be in hot water with the commerce commission late last year for failing to comply with this section.
It was an expensive error, with the debt collection company having to repay debtors or reduce account balances by a total of $3.5 million.
If you'd like to avoid such a situation or would like to discuss this further, contact the team at CollectIT on 07 834 9111 or email@example.com. We pride ourselves on our quality service.