Landlords and property managers are being criticised for asking prospective tenants for their bank statements when vetting for new lets.
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NZ First MP, Darroch Ball, is calling for an investigation after he heard, during a recent select committee submission, an Auckland property manager describing the practice.
"I see a lot of people who are low socio-economic and their bank statements literally will read 'KFC, McDonalds, the dairy, KFC, McDonalds, court fine, trucks that they buy, goods that they can't afford," the property manager said, in the recording.
Mr Ball said the practice is exploitative and risks being used as a mechanism for discrimination.
"It only serves to prejudice tenants who have very little choice about the demands if they are competing for a home," he said.
The Independent Property Managers Association said it's one of many ways landlords get background information on tenants, and that it's standard practice overseas.
Its president Karen Withers said asking for bank statements isn't standard practice in New Zealand but it can be useful for landlords who want to ensure tenants can pay rent.
"Our job is to get a full, rounded view of a tenant. Not to judge them on how they spend their money but whether they have the ability to the owner who we work for and fulfill the insurance obligations."
Tenants can refuse to provide that information if they feel uncomfortable, she said.
While she doesn't actively recommend that landlords ask for that information, she wouldn't discourage it if it was helpful, Ms Withers said.
But critics say it is unethical to ask for that information and could constitute an invasion of privacy.
Consumer NZ said it has received a number of complaints regarding the issue.
Tenants are vulnerable and won't want to risk their tenancy, Consumer NZ Chief Executive Sue Chetwin said.
"It's a very competitive market for tenants," she said.
"So if you decline to hand over your bank statements on the basis that you don't think it's right or that it's not necessary, they're just going to talk to the next person in the queue."
Landlords have other vetting methods they can use including credit checks, references and the tenancy tribunal, she said.
Ms Chetwin said there is also a risk that personal information could be passed into the wrong hands, Ms Chetwin said.
The Real Estate Institute of New Zealand (REINZ) is calling for some clear guidance for the property management industry.
"The focus needs to be around ascertaining whether a tenant has stable employment and can pay the rent, not whether they spend their disposable income on KFC or Uber Eats," said Bindi Norwell, the chief executive of REINZ.
Ms Norwell said the government must create consistent standards for how landlords and property managers go about checking credit.
"While there are many amazing property managers out there, unfortunately their high standards are being undermined by a lack of regulations and also by a small group who don't have the same ethics," Ms Norwell said.
