National Consumer Credit Protection Act 2009

SCHEDULE 1 - NATIONAL CREDIT CODE  

Note:

See section 3 of the National Credit Act.

PART 13 - PRINCIPAL DEFINITIONS  

204   Principal definitions  

204(1)    

In this Code:

acceleration clause
means:

(a) in relation to a credit contract or mortgage - a term of a credit contract or mortgage providing that:

(i) on the occurrence or non-occurrence of a particular event, the credit provider becomes entitled to immediate payment of all, or a part, of an amount under the contract that would not otherwise have been immediately payable; or

(ii) whether or not on the occurrence or non-occurrence of a particular event, the credit provider has a discretion to require repayment of the amount of credit otherwise than by repayments fixed, or determined on a basis stated, in the contract;

but does not include any such term in a credit contract or mortgage that is an on demand facility; or

(b) in relation to a consumer lease - a term of a consumer lease providing that:

(i) on the occurrence or non-occurrence of a particular event, the lessor becomes entitled to immediate payment of all, or a part, of an amount under the lease that would not otherwise have been immediately payable; or

(ii) whether or not on the occurrence or non-occurrence of a particular event, the lessor has a discretion to require payment of an amount payable under a lease otherwise than by repayments fixed, or determined on a basis stated, in the lease.

add-on fee
: see subsection 175AA(3) .

add-on risk product
has the meaning given by subsection 12DMC(2) of the Australian Securities and Investments Commission Act 2001 .

ADI
has the same meaning as in the Banking Act 1959 .

adjusted credit amount
, in relation to a small amount credit contract, means the first amount of credit that is, or is to be, provided under the contract.

Note:

Some amounts are to be disregarded in working out the first amount of credit (see subsection (3) ).

AFCA scheme
has the same meaning as in Chapter 7 of the Corporations Act 2001 .

amend
includes:

(a) omit or omit and substitute; or

(b) alter or vary; or

(c) amend by implication.

amount of credit
: see subsection 3(2) .

annual cost rate
of a credit contract means the annual cost rate of the contract calculated in accordance with section 32B .

annual percentage rate
: see section 27 .

approved external dispute resolution scheme
(Repealed by No 13 of 2018, s 3 and Sch 1 [ 68], effective 6 March 2018. For application provision, see note under s 11 .)

ASIC
means the Australian Securities and Investments Commission.

associated
: see subsection (2) .

Australia
(Repealed by No 154 of 2020, s 3 and Sch 2 [ 62(a)], effective 2 August 2021.)

base price
: see subsection 175AA(6) .

bridging finance contract
: a credit contract is a bridging finance contract if:

(a) when the contract is made, the debtor:

(i) reasonably expects to receive a lump sum before the term of the contract ends; and

(ii) intends to discharge the debtor ' s obligations under the contract so far as possible with that sum; and

(aa) the term of the contract is 2 years or less; and

(b) the conditions (if any) prescribed by the regulations are met.

Bulk Electronic Clearing System
means the system established by the Australian Payments Clearing Association to manage the conduct of the exchange and settlement of bulk electronic low value transactions and includes any replacement system.

business day
means a day that is not:

(a) a Saturday or Sunday; or

(b) a public holiday, special holiday or bank holiday in the place in which any relevant act is to be or may be done.

carried on in this jurisdiction
has a meaning affected by section 12 of the National Credit Act.

cash price
of goods or services to which a credit contract relates means:

(a) the lowest price that a cash purchaser might reasonably be expected to pay for them from the supplier; or

(b) if the goods or services are not available for cash from the supplier or are only available for cash at the same, or a reasonably similar, price to the price that would be payable for them if they were sold with credit provided - the market value of the goods or services.

commission
includes any form of monetary consideration or any form of non-monetary consideration to which a monetary value can be assigned.

Commonwealth
(Repealed by No 154 of 2020, s 3 and Sch 2 [ 62(b)], effective 2 August 2021.)

compulsory insurance
means:

(a) compulsory third-party personal injury insurance; or

(b) insurance of a nature declared by the regulations to be compulsory insurance for the purposes of this Code.

constitutional corporation
has the same meaning as in section 5 of the National Credit Act.

constitutional trade and commerce
has the same meaning as in section 5 of the National Credit Act.

consumer credit insurance
means insurance that insures the capacity of the debtor to make repayments under the credit contract, including insurance against sickness of, injury to, or disability or death of, the debtor or against unemployment of the debtor, and also including life insurance (including insurance under a group policy) to cover any outstanding amount on the debtor ' s death.

consumer lease
: see section 169 .

consumer lease fees or charges
means fees or charges payable in connection with a consumer lease, but does not include:

(a) enforcement expenses; or

(b) government charges, or duties, on receipts or withdrawals.

consumer lease for household goods
means a consumer lease to which Part 11 applies where any of the goods hired under the lease are household goods, but does not include a consumer lease where the goods hired under the lease include:

(a) motor vehicles; or

(b) vehicles that:

(i) are not for use on a road; and

(ii) are of a kind intended primarily for use by persons with restricted mobility; or

(c) goods that are ordinarily used for accommodation (either permanently or temporarily).

continuing credit contract
means a credit contract under which:

(a) multiple advances of credit are contemplated; and

(b) the amount of available credit ordinarily increases as the amount of credit is reduced.

contract
includes a series or combination of contracts, or contracts and arrangements.

contract document
means the document or documents setting out the terms of a contract.

credit
: see subsection 3(1) .

credit assistance
has the same meaning as in section 8 of the National Credit Act.

credit card
has the same meaning as in subsection 133BA(2) of the National Credit Act.

credit card contract
has the same meaning as in subsection 133BA(1) of the National Credit Act.

credit contract
: see section 4.

credit cost amount
: see subsection 32B(3).

credit fees and charges
means fees and charges payable in connection with a credit contract or mortgage, but does not include:

(a) interest charges (including default charges); or

(b) any fees or charges that are payable to or by a credit provider in connection with a credit contract in connection with which both credit and debit facilities are available if the fees or charges would be payable even if credit facilities were not available (not being annual fees or charges in connection with credit card contracts); or

(c) government charges, or duties, on receipts or withdrawals; or

(d) enforcement expenses.

credit limit
has the same meaning as in section 5 of the National Credit Act.

credit provider
means a person that provides credit, and includes a prospective credit provider.

credit-related insurance contract
: see section 142.

credit service
has the same meaning as in section 7 of the National Credit Act.

daily percentage rate
: see section 27.

date
of a notice: see section 196.

debtor
means a person (other than a guarantor) who is liable to pay for (or to repay) credit, and includes a prospective debtor.

default notice
:

(a) in relation to credit contracts, mortgages and guarantees - see section 88; and

(b) in relation to consumer leases - see section 179D.

default rate
: see section 27.

definition
means a provision of this Code (however expressed) that:

(a) gives a meaning to a word or expression; or

(b) limits or extends the meaning of a word or expression.

direct debit
, in relation to the payment of an amount, means the debiting of an amount against an account with a financial institution that is processed through the Bulk Electronic Clearing System, as specified and authorised in writing by:

(a) in relation to the payment by a debtor of an amount for a credit contract - the debtor; and

(b) in relation to the payment by a lessee of an amount for a consumer lease - the lessee.

dispose
of property includes:

(a) sell the property; or

(b) part with possession of the property to the prejudice of the owner or a mortgagee of the property; or

(c) destroy the property.

electronic communication
has the same meaning as in the Electronic Transactions Act 1999 .

enforcement expenses
, in relation to a mortgage, includes expenses incurred by the mortgagee in preserving or maintaining property subject to the mortgage (including insurance, rates and taxes payable for the property) but only if the expenses are incurred after a breach occurs and are authorised by the mortgage.

enforcement proceedings
means:

(a) for a credit contract, consumer lease or guarantee - proceedings in a court to recover a payment due under the contract, lease or guarantee; or

(b) for a consumer lease or mortgage - taking possession of property under the lease or mortgage; or

(c) for a mortgage - taking any other action to enforce the mortgage.

engage in conduct
means:

(a) do an act; or

(b) omit to perform an act.

fail
includes refuse.

goods
includes:

(a) ships, aircraft or other vehicles; or

(b) animals, including fish; or

(c) minerals, trees or crops, whether on, under or attached to land or not;

but does not include anything declared by the regulations not to be goods for the purposes of this Code.

goods mortgage
means a mortgage over goods.

guarantee
includes an indemnity (other than one arising under a contract of insurance).

guarantee document
means the document or documents setting out the terms of a guarantee.

guarantor
includes a prospective guarantor.

hardship notice
:

(a) in relation to credit contracts - see subsection 72(1); and

(b) in relation to consumer leases - see subsection 177B(1).

household goods
means goods of a kind ordinarily acquired for domestic or household purposes.

insolvent
means:

(a) in the case of a natural person - a person who is an insolvent under administration; or

(b) in the case of a corporation - a corporation that is an externally-administered corporation within the meaning of the Corporations Act 2001 .

instrument
includes a statutory instrument.

interest
, in relation to land or other property, means:

(a) a legal or equitable estate in the land or other property; or

(b) a right, power or privilege over, or in relation to, the land or other property.

key requirement
: see Part 6.

land
includes any interest in land.

lessee
means the lessee under a consumer lease to which Part 11 applies, and includes a prospective lessee.

lessor
means the lessor under a consumer lease to which Part 11 applies, and includes a prospective lessor.

linked credit provider
: see subsection 127(1).

linked lessor
: see subsection 179S(1).

long-term lease
, of a motor vehicle, has the meaning given by subsection 12BA(1) of the Australian Securities and Investments Commission Act 2001 .

lowest price
, in relation to the cash price of goods or services to which a credit contract relates, means the lowest price including any goods and services tax but unaffected by any discount between the credit provider and the supplier.

market value
, of goods or services to which a credit contract or consumer lease relates, means fair market value including any goods and services tax.

medium amount credit contract
: a credit contract is a medium amount credit contract if:

(a) the contract is not a continuing credit contract; and

(b) the credit provider under the contract is not an ADI; and

(c) the credit limit of the contract is:

(i) at least $2,001 (or such other amount as is prescribed by the regulations); but

(ii) not more than $5,000 (or such other amount as is prescribed by the regulations); and

(d) the term of the contract is at least 16 days but not longer than 2 years (or such other number of years as is prescribed by the regulations); and

(e) the contract meets any other requirements prescribed by the regulations.

merchant service agreement
means an agreement between a credit provider and a supplier of goods and services under which the credit provider agrees to pay to the supplier amounts for goods or services supplied by the supplier and paid by means of credit cards, whether or not the credit cards are issued by the credit provider.

modification
includes addition, omission or substitution.

mortgage
includes:

(a) any interest in, or power over, property securing obligations of a debtor or guarantor; or

(b) a credit provider ' s title to land or goods subject to a sale by instalments; or

(c) a mortgage taken to have been entered into under subsection 9(3);

but does not include a consumer lease to which Part 11 applies.

mortgage document
means the document or documents setting out the terms of a mortgage by reference to which the mortgage is created.

mortgagor
includes a prospective mortgagor.

motor vehicle
has the meaning given by subsection 12BA(1) of the Australian Securities and Investments Commission Act 2001 .

National Credit Act
means the National Consumer Credit Protection Act 2009 and includes regulations made under section 329 of that Act, but does not include this Code.

number
means:

(a) a number expressed in figures or words; or

(b) a letter; or

(c) a combination of a number so expressed and a letter.

omit
, in relation to a provision of this Code or an Act, includes repeal.

on demand facility
means a credit contract or mortgage under which:

(a) the total amount outstanding under the contract or mortgage is repayable at any time on demand by the credit provider; and

(b) there is no agreement, arrangement or understanding between the credit provider and the debtor or mortgagor that repayment will only be demanded on the occurrence or non-occurrence of a particular event.

penalty
includes forfeiture or punishment.

permitted add-on fee
: see subsection 175AA(9) .

permitted cap
: see subsection 175AA(5) .

permitted delivery fee
: see subsection 175AA(7) .

permitted establishment fee
: see paragraph 31A(1)(a).

permitted installation fees
: see subsection 175AA(8) .

permitted monthly fee
: see subsection 31A(2).

postponement request
:

(a) in relation to credit contracts, mortgages or guarantees - see subsection 94(1); and

(b) in relation to consumer leases - see subsection 179H(1).

power
includes authority.

practising lawyer
means a person who is admitted to the legal profession by a federal court or a Supreme Court of a State or Territory and holds a practising certificate (however described) entitling the person to practise that profession.

printed
includes typewritten, lithographed or reproduced by any mechanical means.

proceedings
means a legal or other action or proceedings.

prohibited credit amount
: see subsection 39A(1).

property
means any legal or equitable estate or interest (whether present or future, vested or contingent, or tangible or intangible) in real or personal property of any description (including money), and includes things in action.

provision
, in relation to this Code or an Act, means words or other matter that form or forms part of this Code or the Act, and includes:

(a) a Chapter, Part, Division, Subdivision, section, subsection, paragraph, subparagraph, subsubparagraph or Schedule of or to this Code or the Act; or

(b) a section, clause, subclause, item, column, table or form of or in a Schedule to this Code or the Act; or

(c) the long title and any preamble to the Act.

purchaser
means:

(a) in relation to goods - a person who purchases, or proposes to purchase, the goods; or

(b) in relation to services - a person who contracts, or proposes to contract, to obtain services.

reference rate
means a benchmark, index or other reference rate.

referring State
has the same meaning as in section 19 of the National Credit Act.

regulation
means a regulation made or in force for the purposes of this Code.

repeal
includes:

(a) revoke or rescind; or

(b) repeal by implication; or

(c) abrogate or limit the effect of this Code or instrument concerned; or

(d) exclude from, or include in, the application of this Code or instrument concerned any person, subject matter or circumstance.

residential property
means:

(a) land on which a dwelling is or will be affixed predominantly for residential purposes; or

(b) a lease of land on which a dwelling is or will be affixed predominantly for residential purposes, being a lease that:

(i) is a Crown lease (within the meaning of the Income Tax Assessment Act 1997 ); and

(ii) gives the lessee reasonable security of tenure; or

(c) a licence in relation to land on which a dwelling is or will be affixed predominantly for residential purposes, being a licence that:

(i) is granted by the Commonwealth, a State or a Territory; and

(ii) gives the licensee reasonable security of tenure; or

(d) a share that:

(i) is in a company that is the legal owner of the land on which a dwelling is or will be affixed predominantly for residential purposes; and

(ii) gives the person who legally owns the share a right to occupy the dwelling; or

(e) a right to occupy a dwelling in an aged care facility or retirement village;

(f) an equity of redemption in relation to land on which a dwelling is or will be affixed predominantly for residential purposes.

retained credit fees and charges
means credit fees and charges retained by the credit provider, other than credit fees and charges passed on to (or retained in reimbursement of an amount paid to):

(a) a third party that is not a related body corporate (for the purposes of the Corporations Act 2001 ) of the credit provider; or

(b) a financial institution that is such a related body corporate in respect of the provision of banking services that are provided to the credit provider by the financial institution on the same terms as those services are ordinarily provided to customers who are not related to or associated with the financial institution.

reverse mortgage
: see section 13A.

reverse mortgaged property
, in relation to a credit contract for a reverse mortgage, means a dwelling or land that has been mortgaged to secure a debtor ' s obligations under the contract.

sale contract
: see section 125.

services
includes:

(a) rights in relation to, and interests in, real property; or

(b) insurance; or

(c) professional services; or

(d) a right to services;

but does not include the provision of credit or a right to credit or services provided under a consumer lease.

sign
includes the affixing of a seal or the making of a mark.

Note:

See section 186.

small amount credit contract
has the same meaning as in section 5 of the National Credit Act.

statutory instrument
means an instrument (including a regulation) made or in force under or for the purposes of this Code, and includes an instrument made or in force under any such instrument.

strata corporation
means:

(a) a body corporate incorporated in relation to land subdivided wholly or mainly for residential purposes under a law of the Commonwealth, a State or a Territory providing for strata, cluster, precinct or other subdivision of land; or

(b) a body corporate whose issued shares confer a right to occupy land for residential purposes.

supplier
means a supplier of goods or services.

supply
includes agree to supply.

termination
of a contract includes the discharge or rescission of the contract.

Territory
:

(a) means the following:

(i) the Australian Capital Territory;

(ii) the Jervis Bay Territory;

(iii) the Northern Territory;

(iv) Norfolk Island;

(v) the Territory of Christmas Island;

(vi) the Territory of Cocos (Keeling) Islands; and

(b) when used in a geographical sense - includes the Territory ' s coastal sea (if any).

this Code
means this Schedule and includes regulations made for the purposes of this Schedule.

this jurisdiction
has the same meaning as in section 21 of the National Credit Act.

tied consumer lease
: see subsection 179S(2).

tied continuing credit contract
: see subsection 127(2).

tied loan contract
: see subsection 127(3).

unexpired monthly fee
: see subsection 31C(2) .

unjust
includes unconscionable, harsh or oppressive.

unpaid balance
: see section 27.

unpaid daily balance
: see section 27.

word
includes any symbol, figure or drawing.

writing
includes any mode of representing or reproducing words in a visible form.

Note:

See section 187.

204(2)    
For the purposes of this Code, a person is associated with a credit provider if:

(a) the person and the credit provider are related bodies corporate for the purposes of the Corporations Act 2001 ; or

(b) the person is a supplier in respect of whom the credit provider is a linked credit provider; or

(c) the person is an officer, agent or employee of the credit provider, or of any such related body corporate or supplier, acting in that capacity.

204(3)    

In working out the first amount of credit that is, or is to be, provided under a small amount credit contract for the purposes of the definition of adjusted credit amount in subsection (1), the following amounts are to be disregarded:

(a) if some or all of the amount of a fee or charge (the fee amount ) payable in relation to the contract forms, or is to form, part of the first amount of credit that is, or is to be, provided under the contract - the fee amount;

(b) if subsection 39A(1) is contravened in relation to the contract - the prohibited credit amount;

(c) any other amount prescribed by the regulations.