Nelson Building Society 'got it wrong' with migrant worker car loans

Friday, 2 May 2025

The lender has apologised to the workers, wiped the loans, paid back interest and fees to the workers, and removed its security interest on their cars.

Nelson Building Society has apologised to 35 migrant workers over car loans that have prompted a complaint to the Commerce Commission.

“It was our mistake,” said Nelson Building Society chief executive Gina Dellabarca.

As well as apologising to the workers and wiping the loans, the building society paid back interest and fees to the workers, and removed its security interest on their cars.

The loans, dating back to 2023, came to light after migrant workers lost their jobs when a company they worked for went bust last year, leaving them unable to make repayments.

The workers, who came to New Zealand to work in the construction industry on Accredited Employer Work visas, were required to buy cars as part of their employment contracts.

On arrival in New Zealand, they were taken to car yards and shown the new cars they were required to buy, with finance arranged for them, and felt they had no choice but to comply. Several lenders provided finance, including Nelson Building Society.

“We had got it wrong, and wanted to put it right,“ said Dellabarca, who joined the building society six months ago.

Problems with the loans were identified by Community Law Otago (CLO) after the workers were referred from the Citizens Advice Bureau.

Charlotte Whittaker from CLO contacted the building society to complain.

“They came back and said, ‘We are going to put this right’,” Whittaker said.

“They said they [the workers] will get to keep their cars. They will get their loans written off, and in a couple of days the security will be removed from the PPSR [Personal Property Securities Register],” she said.

That had now happened.

The building society also wrote letters of apology to the workers.

Gina Dellabarca is the new chief executive of NBS.

Dellabarca said speed was important because of the circumstances of the workers, who had been left without work.

“If it’s not right, we wanted to move really quickly,” Dellabarce said. “Personally on a human level, these people lost their jobs, and we needed to resolve it for them.”

Nelson Building Society was focused on serving its local communities in Nelson, Richmond, Motueka, Tākaka, Westport, Greymouth and Ashburton, she said.

The Commerce Commission says it is considering the CLO complaint.

Dellabarca said. “We are really about helping people into homes and businesses.”

Whittaker said another lender she had complained to had provided some compensation, but had not gone as far as the building society.

CLO has written to ministers about migrant workers on accredited employer work visas being required to buy new cars and take out loans.

It has also circulated an all-points bulletin to financial mentors, Citizens Advice Bureaus and community law centres to identify more cases, as it believes the cases it has identified could be “the tip of the iceberg”.

“We are concerned of the scale of harm as there may be many others who are in the similar situation but don’t have advocates, know their rights, have not reached out for assistance and if they have, then have not been given the correct information,” CLO said in its complaint to the commission.

The Commerce Commission confirmed it had received the complaint, and a spokesperson said: “The commission is considering this and engaging with the entity involved.”

Car loans are one of the key targets for the commission in its current action plan.