Finance company agrees to halve debt of victim of economic

An Auckland finance company’s decision not to pursue a woman for the whole of a loan she was left with after an abusive relationship is a precedent other lenders should take note of, says charity, Good Shepherd.

Nicola Eccleton, social inclusion manager at Good Shepherd, said the woman had incurred the debt after being coerced into guaranteeing a car loan during an abusive relationship.

When she ended the relationship last year, and her former partner stopped making repayments on his loan, Aotea Finance pursued the woman for the whole loan.

But after months of negotiations with Good Shepherd, Aotea Finance agreed to split the loan and only seek repayment of half from her, Eccleton said.

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Economic harm was a little-recognised form of family violence, but it was becoming better known as campaigners and advocates, pushed to lift its profile, she said.

That was helping victim and survivor advocates negotiate fairer deals with lenders, or overturn loans, when lenders had not met their lending responsibilities.

“We are chipping away, and setting new standards for expectations,” Eccleton said.

Aotea Finance director Terry Cooke says there is no one size fits all to resolve such issues.

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Aotea Finance director Terry Cooke says there is no one size fits all to resolve such issues.

In April, the case of another lender which went even further by writing off $12,000 owed by a woman pressured into debt by an abusive partner, came to light.

In that case, the lender had not done a proper affordability assessment, and the woman complained to a complaints handling scheme.

Bank of New Zealand revealed late last year that it had waived the debts of victims of economic abuse.

The woman helped by Good Shepherd has a protection order is in place and cannot be named.

She said her relationship was abusive, and she was coerced into guaranteeing a loan in 2021, so he could buy a car. His poor credit history meant he would not qualify for a loan without the guarantee, she said.

“Everything was fine at first, but as time went on he started to get controlling, and demanding that I do what he said, or there would be consequences,” she said.

“I couldn’t go to the shops by myself. I couldn’t go and pick up the children from school by myself,” she said.

“I couldn’t spend anything without him knowing about it.”

Her partner had arranged the guarantee, and brought the paperwork for her to sign, and she said she felt she had no choice but to agree.

“He brought it to me, and then watched me sign it, and then took it to wherever he had to go with it,” she said.

Nicola Eccleton, social inclusion manager at Good Shepherd, says the woman had incurred the debt after being coerced into guaranteeing a car loan during an abusive relationship.

Stacy Squires/Stuff

Nicola Eccleton, social inclusion manager at Good Shepherd, says the woman had incurred the debt after being coerced into guaranteeing a car loan during an abusive relationship.

After interest and fees, the loan ended up at just over $3200.

She said Aotea Finance asked her to repay the entire loan at a rate of $80 a week, which she could not afford.

Aotea Finance director Terry Cooke said there is no one size fits all to resolve such issues.

“Each case has to be frankly and factually resolved on its own merits,” Cooke said.

“It is critical that full information about the loan and subsequent events are known, and this seldom happens,” he said.

“We can’t always resolve these situations as parties can become belligerent or difficult to deal with,” he said.

Most loans were in joint names and each party was liable for the debt, he said.

“On occasions a satisfactory resolution is difficult to arrive at, if client advocates become involved, as they can become very protective of their client, and the story they have can vary markedly from the reality,” he said.

Minister for Women Jan Tinetti said economic harm was a form of violence and abuse that was often overlooked.

“Given the short and long term consequences of economic harm, we need to ensure the tools and resources are in place to manage the ongoing impacts for victims,” she said.

Keuangan