The government is to cap the fee for wheel clamping at $100 to stop wheel clampers charging excessive fees and preying on motorists.
In new measures to stop "cowboy" clampers, businesses that charge more could be fined up to $15,000.
Commerce and Consumer Affairs Minister Kris Faafoi said he had heard the concerns of the public who were being targeted by clampers charging as much as $700 for removal of a wheel clamp.
"Wheel clamping is common on private land, particularly in cities, and the practice is not currently regulated. The law has been sadly lacking and that has resulted in some of the cowboy operators charging outrageous fees," he said in a statement.
"While some operators were working to a voluntary code intended to protect consumers, it was not a level playing field and some were deliberately preying on people. Something needed to change to protect consumers from the financial loss and emotional distress caused by these unscrupulous operators."
Police will be able to charge infringement fees of up to $1000 for an individual and $5000 for a company, and a fine of up to $3000 for an individual and $15000 for a company can be imposed if the matter goes to Court.
Minister for Transport Phil Twyford said cowboy clampers had been using standover tactics to squeeze unfair fees out of motorists for far too long.
"Many New Zealanders have been horrified by the stories of clampers swooping in mere seconds after people have parked and then demanding excessive fees to free up their car," he said.
The Land Transport Act 1998 will be amended to bring in the change.