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

15   After Division 5 of Part 2 of the National Credit Code

Insert:

Division 5A - Additional rules relating to small amount credit contracts

39A Limit on the application of amount of credit provided under a small amount credit contract

(1) No part of the amount of credit provided under a small amount credit contract may be applied to pay an amount (the prohibited credit amount ) to:

(a) the credit provider; or

(b) a person prescribed by the regulations.

(2) Subsection (1) does not apply to:

(a) an amount of a permitted establishment fee, or a permitted monthly fee, payable in relation to the small amount credit contract; or

(b) an amount of a government fee, charge or duty payable in relation to the small amount credit contract; or

(ba) if some or all of the amount of credit (the refinanced amount ) is to refinance some or all of the amount of credit provided by the credit provider to the debtor under another small amount credit contract - the refinanced amount; or

(c) an amount prescribed by the regulations.

(3) If subsection (1) is contravened in relation to a small amount credit contract:

(a) the debtor is not liable (and is taken never to have been liable) to repay the prohibited credit amount to the credit provider; and

(b) the debtor may recover as a debt due to the debtor any amount paid to the credit provider to the extent that it relates to the prohibited credit amount.

39B Limit on amount that may be recovered if there is default under a small amount credit contract

(1) If there is a default in payment under a small amount credit contract, the maximum amount that may be recovered (whether by repayments under the contract or otherwise) by the credit provider in relation to the contract must not exceed an amount that is twice the adjusted credit amount in relation to the contract.

(2) Any provision of the small amount credit contract that confers a greater right is void to the extent that it does so. If an amount is in fact recovered in excess of this limitation, it may be recovered back.

(3) This section does not apply to enforcement expenses.

39C Credit provider must do prescribed things if a default in payment by direct debit occurs

(1) If:

(a) the amount of repayments under a small amount credit contract are to be paid by way of direct debit; and

(b) the direct debit has been authorised by the debtor; and

(c) a default in the payment of an amount of a repayment occurs;

the credit provider must do the things prescribed by the regulations.

Criminal penalty: 50 penalty units.

(2) In this section, direct debit has the same meaning as in section 87.