A community worker in South Auckland says he is hearing of more cases of loan sharks using unscrupulous methods to get their money back.
Salvation Army policy analyst Ronji Tanielu was commenting following news that an Auckland loan company is being investigated over claims its staff use weapons to force people to pay up.
Gavin John Marsich, a director of south Auckland money lender Twenty Fifty Club, appeared in the Manukau District Court on Friday charged with possession of an offensive weapon. Mr Marsich has told Radio New Zealand that the allegations of standover tactics are untrue and the weapon police say he had is a knife that he uses to prepare meat.
Mr Tanielu said he hears from clients about lenders using unethical ways of getting clients to re-pay money. He said lenders in south Auckland prey on low-income communities, and the government needs to take more notice of the issue.
First Union spokesperson Jerome Mika said lenders prey on poor and vulnerable communities and charge incredibly high interest loans. He said people won't speak out if they are being threatened and will go to extreme lengths to pay the money rather than seek help.
Commerce Minister Craig Foss said a bill before parliament will help crack down on unscrupulous lenders who prey on desperate people.
Mr Foss said the Credit Contracts and Financial Services Law Reform Bill, which is in front of a select committee, will include a new code of responsible lending and will have better controls against misleading, deceptive or confusing advertising.