Social service groups call for pause to debt recovery, late payment fees and disconnections

NZ Herald

5 Apr, 2020 06:45 AM3 mins to read

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Social service organisations are calling on essential utility services to halt disconnections, late payment fees and debt recovery during the Covid-19 crisis.

Companies proving essential services including energy, telecommunications and internet, banking, finance, insurance and rental housing should provide further support to their communities, the group says.

This means no disconnections or stopping service during the crisis. Penalties and late fees, including additional interest charges, should be waived and debt recovery should be paused, the group said.

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The 15-strong group includes the Salvation Army, Age Concern, Child Poverty Action Group, Consumer NZ, NZ Council of Trade Unions, Citizens Advice Bureau NZ and Nga Tangata Microfinance.

The measures would ease the pressure on already-stressed families surviving on a reduced income going into winter, the group said. "Many of the businesses we are addressing already have existing hardship obligations under law or industry codes of conduct. They must now ensure that assistance is easily available."

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The group wants more support for struggling communities, such as rent holidays for tenants who have lost their income.

Child Poverty Action Group has long been concerned that harsh debt repayments have pushed many families into despair and poverty, said Economics spokesperson Dr Susan St John.

"We are aware of people paying reparations on overpaid welfare benefits, which has caused extreme distress."

"Suspension or debt forgiveness is urgent, as is giving people the full Working For Families for their children."

Aimee Mai, CEO of Christians Against Poverty said essential services should have compassion for Kiwis in hardship.

"As Covid-19 hits home, applications for high-interest loans are increasing
among people with low credit scores," she said.

"Some are seeking loans just to buy food. These loans can be harmful to vulnerable families in the best of times; during a crisis they can be devastating.

"It's vital that service providers treat their customers with care and lenders ensure new loans are affordable and do not increase people's suffering. We hope that looking back, we'll see these businesses playing their roles to protect the vulnerable in our communities."

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Citizens Advice Bureau chief executive Kerry Dalton said it was vital that providers of essential services were socially responsible during the pandemic.

"They need to ensure that those whose income has been hit hard by the Covid-19 crisis continue to receive their essential services without this increasing hardship through debt or penalties."

The group called on central and local government to temporarily prohibit late payment fees and debt collection.

"Many of the repayments that seriously threaten the wellbeing of people in hardship are for debts held by government," it said.

The organisations said they will work alongside services. • Covid19.govt.nz: The Government's official Covid-19 advisory website