Financial Sector Reform Act 2022 (87 of 2022)

Schedule 4   Consumer credit reforms

Part 1   Small amount credit contracts

National Consumer Credit Protection Act 2009

15   After section 31B of the National Credit Code

Insert:

31C Prohibition on unexpired monthly fees in relation to small amount credit contracts

Requirement

(1) A credit provider must not require or accept payment by the debtor under a small amount credit contract of an unexpired monthly fee.

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

(2) An unexpired monthly fee in relation to a small amount credit contract is each permitted monthly fee that is in respect of a month that commences after the date on which the contract is paid out.

(3) If a credit provider contravenes subsection (1) in relation to a small amount credit contract:

(a) the debtor is not liable (and is taken never to have been liable) to make the payment of the unexpired monthly fee to the credit provider; and

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

Offence

(4) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

(c) the conduct contravenes the requirement.

Criminal penalty: 100 penalty units.

Strict liability offence

(5) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

(c) the conduct contravenes the requirement.

Criminal penalty: 10 penalty units.

(6) Subsection (5) is an offence of strict liability.