The CCCF Act applies to credit contracts, certain leases and buy-back transactions entered into after 1 April 2005. 

The Act can apply to contracts entered into before 1 April 2005 but only if the lender makes that election.  A debtor cannot make this decision.  The lender cannot make an election if it increases the debtor’s obligations under the contract.  If the lender makes an election they must notify the debtor or guarantor within 5 working days.

The information about the Act contained in this website is intended to assist understanding, and the Commission recommends legal advice should be sought to determine the Act’s applicability to individual situations.

The Act:

• states what information about the transactions consumers must be given, when it must be given and what form the information should take;
• sets minimum standards for some contractual terms; for example, the Act sets standards about the way in which interest is calculated and charged.  There are also rules on credit fees and credit related insurance;
• covers the circumstances in which a consumer credit contract can be cancelled;
• provides rules covering early repayment of debt including rules about how much a creditor can charge in these circumstances.
• deals with the circumstances under which a consumer can ask to change a consumer credit contract;
• allows the Court to reopen contracts if they are oppressive;
• prevents creditors from enforcing contracts if they have not complied with particular provisions of the Act;
• sets up a regime of statutory damages that will apply automatically if particular provisions of the Act have been breached;
• makes breaching certain provisions of the Act a criminal offence punishable by fines and, in some cases, by imprisonment.

The Commerce Commission is responsible for enforcing the provisions of the Act and is able to take civil and criminal action against credit providers who have breached its provisions.

The Commission’s Role and Powers

The Commerce Commission’s role is to promote compliance with the CCCF Act.

The Commission’s functions under the Act are to monitor trade practices in finance markets; undertake prosecutions and civil proceedings; and to make information available to parties involved in these transactions in order to promote compliance with the Act.

In fulfilling its role under the CCCF Act, the Commission has numerous powers, including that of search and seizure; the power to take evidence; and to require people to supply information or documents.

If you require further information on the Credit Contracts and Consumer Finance Act 2003 please read our related publications.