The decision by Auckland’s financial firm not to pursue women with the full amount of the loan left to her after an abusive relationship is a precedent for other lenders to watch out for, says charity Good Shepherd.
Nicola Eccleton, head of social inclusion in Good Shepherd, said the woman was in debt after being forced to secure a car loan during an abusive relationship.
Last year, Aotea Finance sued the woman for a full loan when the relationship ended and her former partner failed to repay the loan.
However, after months of negotiations with Good Shepherd, Aotea Finance agreed to split the loan and seek only half the repayment, Ekleton said.
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Economic harm was an unrecognized form of domestic violence, but it became more and more well-known as activists and supporters were forced to come forward, he said. ..
This helped victims and survivor advocates negotiate a fairer deal with the lender or cancel the loan when the lender failed to fulfill its credit responsibilities.
“We are lowering and setting new standards of expectation,” Ekleton said.
In April, another lender’s proceedings went further by canceling the $ 12,000 owed by a woman borrowing from an abusive partner.
In this case, the lender was unable to carry out a reasonable affordable valuation and the woman complained about the complaint management plan.
The Bank of New Zealand revealed at the end of last year that it had canceled the debt of victims of economic abuse.
Women who are helped by Good Shepherd have protection orders and cannot be named.
She said their relationship was abusive and she was forced to secure a loan in 2021 so he could buy a car. His poor credit history meant he wasn’t eligible for an unsecured loan, he said.
“Everything was fine at first, but over time he began to control himself and demanded that I do what he said, otherwise the results would come out,” she says. rice field.
“I couldn’t go shopping alone. I couldn’t pick up the kids from school alone,” she said.
“I couldn’t use anything without his knowledge.”
Her partner arranged a deposit and brought it to sign the paperwork, and she said she felt she had no choice but to agree.
“He brought it to me and then saw me sign it, and he took it where it needed to go with it,” he said.
After deducting interest and fees, the loan was just over $ 3,200.
She said Aotea Finance asked her to repay her full loan at a rate of $ 80 a week, which she couldn’t afford.
Aotea’s chief financial officer, Terry Cooke, said there was no one-size-fits-all solution to such a problem.
“Each case must be decided on the basis of its own strengths, frankly and factually,” Cook said.
“It is imperative that all information about the loan and what happened afterwards is known, and that rarely happens,” he said.
“We can’t always solve these situations because political parties can be warlike and difficult to manage,” he said.
He said most of the loans have a common name and each party is responsible for the debt.
“Involving mediators can be very protective to our clients, and their story can be very different from reality, so it can be difficult to get a satisfactory solution,” he declares. did.
Women’s Minister Jan Tinetti said economic damage is a form of violence and abuse that is often overlooked.
“Given the short-term and long-term consequences of economic damage, we need to have the tools and resources to manage the ongoing impact on victims,” he said.