National Consumer Credit Protection Act 2009

SCHEDULE 1 - NATIONAL CREDIT CODE  

Note:

See section 3 of the National Credit Act.

PART 2 - CREDIT CONTRACTS  

Division 1 - Negotiating and making credit contracts  

17   Matters that must be in contract document  

17(1)    
The contract document must contain the following matters.

Credit provider ' s name

17(2)    
The contract document must contain the credit provider ' s name.

Amount of credit

17(3)    
The contract document must contain:

(a) if the amount of credit to be provided is ascertainable:

(i) that amount; and

(ii) the persons, bodies or agents (including the credit provider) to whom it is to be paid and the amounts payable to each of them, but only if both the person, body or agent and the amount are ascertainable; and

(b) if the amount of the credit to be provided is not ascertainable - the maximum amount of credit agreed to be provided, or the credit limit under the contract, if any; and

(c) if the credit is provided by the supplier for a sale of land or goods by instalments - a description of the land and its cash price or of the goods and their cash price.

The requirement under paragraph (c) is in addition to, and does not limit, the requirement under paragraph (a) or (b).

Note:

A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.

Annual percentage rate or rates

17(4)    

In the case of a credit contract other than a small amount credit contract, the contract document must contain:

(a) the annual percentage rate or rates under the contract; and

(b) if there is more than one rate, how each rate applies; and

(c) if an annual percentage rate under the contract is determined by referring to a reference rate:

(i) the name of the rate or a description of it; and

(ii) the margin or margins (if any) above or below the reference rate to be applied to determine the annual percentage rate or rates; and

(iii) where and when the reference rate is published or, if it is not published, how the debtor may ascertain the rate; and

(iv) the current annual percentage rate or rates.

Note:

A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.

Calculation of interest charges

17(5)    

In the case of a credit contract other than a small amount credit contract, the contract document must contain the method of calculation of the interest charges payable under the contract and the frequency with which interest charges are to be debited under the contract.

Note:

A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.

Total amount of interest charges payable

17(6)    

In the case of a credit contract other than a small amount credit contract, the contract document must contain the total amount of interest charges payable under the contract, if ascertainable (but only if the contract would, on the assumptions under sections 180 and 182, be paid out within 7 years of the date on which credit is first provided under the contract).

Note:

A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.

Repayments

17(7)    
The contract document must contain:

(a) if more than one repayment is to be made:

(i) the amount of the repayments or the method of calculating the amount; and

(ii) if ascertainable, the number of the repayments; and

(iii) if ascertainable, the total amount of the repayments, but only if the contract would, on the assumptions under sections 180 and 182, be paid out within 7 years of the date on which credit is first provided under the contract; and

(iv) when the first repayment is to be paid, if ascertainable, and the frequency of payment of repayments; and

(b) if the contract provides for a minimum repayment, the amount of that repayment, if ascertainable, but, if not, the method of calculation of the minimum repayment.

Paragraph (a) does not apply to minimum repayments under a continuing credit contract.

Credit fees and charges

17(8)    
The contract document must contain:

(a) a statement of the credit fees and charges that are, or may become, payable under the contract, and when each such fee or charge is payable, if ascertainable; and

(b) the amount of any such fee or charge if ascertainable, but, if not, the method of calculation of the fee or charge, if ascertainable; and

(c) the total amount of credit fees and charges payable under the contract to the extent that it is ascertainable.

Note:

A penalty may be imposed for contravention of a key requirement in paragraph (a) or (b), but only in respect of retained credit fees and charges: see Part 6.

Changes affecting interest and credit fees and charges

17(9)    
If the annual percentage rate or rates or the amount or frequency of payment of a credit fee or charge or instalment payable under the contract may be changed, or a new credit fee or charge may be imposed, the contract document must contain a statement or statements to that effect and of the means by which the debtor will be informed of the change or the new fee or charge.

Note:

A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.

Statements of account

17(10)    
The contract document must contain the frequency with which statements of account are to be provided to the debtor (except in the case of a credit contract for which the annual percentage rate is fixed for the whole term of the contract and under which there is no provision for varying the rate).

Default rate

17(11)    
The contract document must contain:

(a) if the contract is a contract under which a default rate of interest may be charged when payments are in default - a statement to that effect and the default rate and how it is to be applied; and

(b) if the default rate under the contract is determined by referring to a reference rate:

(i) the name of the rate or a description of it; and

(ii) the margin or margins (if any) above or below the reference rate to be applied to determine the default rate; and

(iii) when and where the reference rate is published or, if it is not published, how the debtor may ascertain the rate; and

(iv) the current default rate.

Note:

A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.

Enforcement expenses

17(12)    
The contract document must contain a statement that enforcement expenses may become payable under the credit contract or mortgage (if any) in the event of a breach.

Mortgage or guarantee

17(13)    
The contract document must contain:

(a) if any mortgage or guarantee is to be or has been taken by the credit provider - a statement to that effect; and

(b) in the case of a mortgage - a description of the property subject to, or proposed to be subject to, the mortgage, to the extent to which it is ascertainable.

Commission

17(14)    
If a commission is to be paid by or to the credit provider for the introduction of credit business or business financed by the contract, the contract document must contain:

(a) a statement of that fact; and

(b) the person by whom the commission is payable; and

(c) the person to whom the commission is payable; and

(d) the amount if ascertainable.

Commission
does not include fees payable by a supplier under a merchant service agreement with a credit provider, an amount payable in connection with a credit-related insurance contract or commission paid to employees of the credit provider.

Insurance financed by contract

17(15)    
If the credit provider knows that the debtor is to enter into a credit-related insurance contract and that the insurance is to be financed under the credit contract, the contract document must contain:

(a) the name of the insurer; and

(b) the amount payable to the insurer or, if it is not ascertainable, how it is calculated; and

(c) the kind of insurance and any other particulars that may be prescribed by the regulations; and

(d) if the credit provider knows of any commission to be paid by the insurer for the introduction of the insurance business - a statement that it is to be paid and, if ascertainable, the amount of the commission expressed either as a monetary amount or as a proportion of the premium.

In the case of consumer credit insurance that includes a contract of general insurance within the meaning of the Insurance Contracts Act 1984:

(e) it is sufficient compliance with paragraphs (a) and (b) if the contract document contains the name of the general insurer and the total amount payable to the insurers (or, if it is not ascertainable, how it is calculated); and

(f) it is sufficient compliance with paragraph (d) relating to the amount of commission if the contract document contains the total amount of commission (expressed as a monetary amount or as a proportion of the premium) to be paid by the insurers.

Note:

A penalty may be imposed for contravention of a key requirement in paragraph (a) or (b): see Part 6.

Provisions for person other than debtor to occupy reverse mortgaged property

17(15A)    

If the credit contract for a reverse mortgage is to make provision for a person other than the debtor to occupy the reverse mortgaged property, the contract document must contain provisions that have the following effect (whether or not the document also contains other provisions relating to such occupation by such a person):

(a) the debtor may at any time (before, when or after the contract is made):

(i) nominate to the credit provider a person who is to be allowed to occupy the property (whether alone or with other persons); and

(ii) revoke such a nomination by notice given to the credit provider;

(b) while a nomination described in paragraph (a) is in force, the nominated person has the same rights (against the credit provider) to occupy the property as the debtor has or would have apart from the death of the debtor or vacation of the property by the debtor.

Note:

Other provisions contained in the contract document may, for example, limit the kinds of persons whom the debtor may nominate to the credit provider as persons who are to be allowed to occupy the property.

Other information

17(16)    
The contract document must contain any information or warning required by the regulations.

Note:

Sections 180 to 182 set out the tolerances and assumptions applicable to matters required to be disclosed.