More ratepayer distress as QLDC makes claims on 594 personal bank accounts

The Queenstown Lakes District Council has lodged claims against 594 personal bank accounts in an attempt to recover unpaid rates, but the process is raising questions about the fairness of the process.

Crux reported yesterday on one ratepayer with health issues who was looking to sell possessions after being pushed by the council into an unauthorised overdraft. Today, another ratepayer, who does not wish to be named, has had $1,400 taken from her bank account last month, even after she'd entered into an instalment agreement with the QLDC.

She tells Crux as a single-parent, her budget is tight.

"This meant I had to go to the food bank. It also meant I defaulted on my life insurance, car insurance, gas bill, and ironically, my arranged rates payment to the QLDC.

"I called the rates department in regards to this. I was assured that they would never do this and don't have any access to my accounts. I said that they definitely did take it."

She says she had seen reports of moves by the council to recover rates debt in local media, but the council staff member told her they didn't know what she was talking about and again assured her it wasn't them who took it.

"Two weeks after this amount came out, I received a letter from my bank explaining they had allowed the QLDC to take the money."

She says it is "not a nice feeling knowing that everything in your account could be taken at any time", especially when she had set up a payment plan with the council.

"I am well aware that I am behind in my rates but thought I had completed the correct steps in contacting the QLDC.

"I have no idea how I am going to catch up on the automatic payments that defaulted. I had carefully budgeted for each."

Crux has spoken with the New Zealand Banking Association and Local Government New Zealand, both of whom say that this type of direct council recovery of rates from a personal bank account seems relatively rare. In fact neither organisation could name another council that had done this.

In a statement to Crux the New Zealand Banking Association said:

“In this case, it appears the local authority is exercising its power under the Local Government (Rating) Act 2002 to collect the rates due. Banks take their obligations to comply with the law very seriously.

“Anyone experiencing financial difficulty should contact their bank as soon as possible to see if there are any options available to help see them through.”

Local Government New Zealand told Crux that they have no data on this type of rates recovery by councils and referred us to the Department of Internal Affairs for comment on the legality of the process.

Please contact [email protected] if you have had money deducted, without your permission, from your bank account by the QLDC.