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

4   After section 23 of the National Credit Code

Insert:

23A Prohibited monetary obligations - small amount credit contracts

(1) A small amount credit contract must not impose a monetary liability on the debtor:

(a) in respect of an interest charge (including a default rate of interest) under the contract; or

(b) in respect of a fee or charge prohibited by this Code; or

(c) in respect of an amount of a fee or charge exceeding the amount that may be charged consistently with this Code.

(2) If a provision of a small amount credit contract imposes a monetary liability prohibited by subsection (1) then:

(a) each provision (the void provisions ) of the contract that imposes a monetary liability of a kind referred to in that subsection (whether or not the liability is imposed consistently with this Code) is void to the extent that the provision relates to the liability; and

(b) the debtor may recover as a debt due to the debtor any amount paid to the credit provider under the void provisions to the extent that the amount relates to the liability.