Consumer Credit Legislation Amendment (Enhancements) Act 2012 (130 of 2012)

Schedule 4   Caps on costs etc. for credit contracts

National Consumer Credit Protection Act 2009

12   After section 31 of the National Credit Code

Insert:

31A Restrictions on fees and charges for small amount credit contracts

(1) A small amount credit contract must not impose or provide for fees and charges if the fees and charges are not of the following kind:

(a) a permitted establishment fee;

(b) a fee or charge (a permitted monthly fee ) that is payable on a monthly basis starting on the day the contract is entered into;

(c) a fee or charge that is payable in the event of a default in payment under the contract;

(d) a government fee, charge or duty payable in relation to the contract.

Note: See section 39B for the maximum amount that may be recovered by the credit provider if there is a default in payment under the contract.

(1A) Despite subsection (1), a small amount credit contract must not impose or provide for a permitted establishment fee if any of the amount of credit to be provided under the contract is to refinance any of the amount of credit provided to the debtor under another small amount credit contract.

Permitted establishment fee

(2) A permitted establishment fee is a fee or charge the amount of which must not exceed 20% of the adjusted credit amount in relation to the small amount credit contract.

Maximum amount of permitted monthly fee

(3) The amount of a permitted monthly fee that may be imposed or provided for under a small amount credit contract must not exceed 4% of the adjusted credit amount in relation to the contract.

31B Credit provider or prescribed person must not require or accept payment of a fee or charge in relation to a small amount credit contract etc.

(1) A credit provider, or a person prescribed by the regulations, must not require or accept payment by the debtor of a fee or charge in relation to:

(a) a small amount credit contract; or

(b) the provision of the amount of credit under a small amount credit contract; or

(c) a thing that is connected with a small amount credit contract or the provision of the amount of credit under such a contract.

Criminal penalty: 100 penalty units.

(2) Subsection (1) does not apply if the fee or charge is:

(a) a fee or charge that may be imposed or provided for by the small amount credit contract under section 31A; or

(b) a fee or charge prescribed by the regulations.

(3) If a credit provider or person contravenes subsection (1):

(a) the debtor is not liable (and is taken never to have been liable) to make the payment to the credit provider or person; and

(b) the debtor may recover as a debt due to the debtor the amount of any payment made by the debtor to the credit provider or person.