The National Party plans to overhaul consumer credit laws to protect unwary consumers being preyed upon by unscrupulous credit companies if it is returned to power.
"There has been significant and much-needed reform of the investment side of the financial sector over the past three years," Finance Minister Bill English said.
However, credit providers remained largely unregulated and had no conduct requirements, leading them to exploit vulnerable people. That led to severe financial hardship and spiralling debt, which was not acceptable, he said.
The targeting of loan sharks was part of a mainly warmed-over commerce policy released yesterday by Prime Minister John Key and Mr English.
Much of the policy is part of Bills before Parliament that will be passed if National retains power at the November 26 election.
As part of the overhaul of credit laws, National would keep trying to increase the knowledge and skills of potential investors by working with the public and private sectors to identify further steps to improve investor literacy, Mr Key said.
National would also improve public understanding of incurring debt, particularly through marginal lenders or loan sharks.
The party intended to pass the Financial Markets Conduct Bill. Some of the main proposals included replacing the requirement for issuers to prepare a prospectus and investment statement with a requirement to prepare a single product disclosure statement tailored to retail investors, he said.
Also, penalties would be introduced of up to $1 million for individuals and $5 million for companies if they were making misleading statements in product disclosure statements and advertisements.