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Consumer Credit Enhancements |
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The Consumer Credit Legislation Amendment (Enhancements) Act 2012 (Cth) (the "Act") received Royal Assent on 18 September 2012.
The amendments introduced by the Act, most of which will come into force on 1 March 2013, deal with:
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short term and small amount credit contracts
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hardship applications
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caps on costs for credit contracts
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consumer lease amendments, and
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reverse mortgages.
The key issue for each for these amendments are:
1. Short term and small amount credit contracts
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A prohibition on credit contracts by non ADIs which are for under $2000 and have a term of 15 days or less
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Regulation of small amount credit contracts, and
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Introduction of required warnings and notices on premises and websites.
2. Caps on costs for credit contracts
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Introduction of specific caps for interest and fees for small, medium and other credit contracts where the lender is not an ADI, and
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48% interest cap for medium amount and other contracts.
3. Hardship application
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Expansion of the scope of the hardship application provisions, particularly, the removal of the $500,000 limit, and
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No restriction on the ways in which a credit contract can be varied.
4. Consumer leases
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Requirement for the provision of periodic account statements and end of lease statements,
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Introduction of statutory liability on a lessor for a supplier’s misrepresentation.
5. Reverse Mortgages
If you require any information on the Act or would like a copy of the paper presented by two of the partners of our Credit Law team, Peter Ryan and David Carter, at the recent LexisNexis Consumer Credit Law Conference on the Gold Coast on Friday, 21 September 2012, please contact:
T +61 2 8233 9550
F +61 2 8233 9555
T +61 2 8233 9549
F +61 2 8233 9555
The information in this document is provided for general guidance only. It is not legal advice, and should not be used as a substitute for consultation with professional legal or other advisors. No warranty is given to the correctness of the information contained in this document, or its suitability for use by you. To the fullest extent permitted by law, no liability is accepted by DibbsBarker for any statement or opinion, or for an error or omission or for any loss or damage suffered as a result of reliance on or use by any person of any material in the document. This publication is copyright. Apart from any use as permitted under the Copyright Act 1968, it may only be reproduced for internal business purposes, and may not otherwise be copied, adapted, amended, published, communicated or otherwise made available to third parties, in whole or in part, in any form or by any means, without the prior written consent of DibbsBarker.
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