These guidelines describe the Commission’s enforcement approach to fees subject to the Act, in particular to establishment fees, other credit fees and default fees[1].

The Act has been fully in force for some time and the Commission considers it appropriate to release guidelines in light of what has developed over that time both judicially and through its practice and experience of enforcing the CCCF Act. The guidelines represent the Commission’s current views about the fees provisions of the CCCF Act. They will be modified as judicial precedent becomes available.

Although it is the court’s role to decide whether or not a credit or default fee is unreasonable, in the absence of judicial precedent the Commission recognises that creditors may wish to consider the Commission’s enforcement approach to fees.

The approach within the guidelines is not binding. However the guidelines should provide creditors with an indication of factors which may trigger a Commission investigation. The guidelines are not intended to be a substitute for legal advice or to provide an exhaustive list of the factors the Commission may take into account when assessing alleged breaches of the CCCF Act against its enforcement criteria. The Commission will continue to exercise its discretion in determining which conduct or issues it investigates and which enforcement outcomes are appropriate in any given situation.

Submissions

Interested parties can make submissions on the guidelines. Submitters are asked to provide written submissions including full contact details[2] and where possible evidence or examples supporting their submissions. The Commission does not intend responding to all individual submissions however material within submissions may be used to identify areas within the guidelines which could be developed further.

Submissions are subject to the Official Information Act 1982. Submitters should clearly highlight any information that is commercially sensitive or contains personal information. Submitters are requested to highlight commercially sensitive or personal information by containing it within square brackets. Personal information supplied to the Commission is subject to the Privacy Act[3] and will only be used by the Commission in relation to the guidelines - subject to any Official Information Act requirements.

Submissions in relation to the issues raised in this guideline should be posted, faxed or emailed by 5pm on 1 May 2009 to

Credit Fees Submissions

Commerce Commission

PO Box 105 222

AUCKLAND 1143

Email creditfeesubmissions@comcom.govt.nz

Fax number (09) 9203481

Late submissions may not be considered.

Consultation questions

• Do you have any concerns about the contents of the guidelines? Please provide a detailed explanation of the particular issues you are concerned about and outline the basis for your concerns.

• Are there any alternative approaches to setting fees that you would like the Commission to consider and provide comment and/or guidance on? If so, please provide details of those approaches.

• Do you want the Commission to specifically address any other issues and/or cost categories within the guidelines? If so, please provide details and a discussion/explanation of the approach you consider should be taken in relation to these issues and/or cost categories.

• Do you have any concerns about the Commission’s treatment of specific cost recoveries within fees? If so, please describe your concerns.

Further guidance

The Commission is currently considering options for providing further guidance about its enforcement of the Act to creditors, consumers and interested parties with the objective of promoting compliance with the Act. It would assist the Commission in targeting any further guidance appropriately if you could provide feedback on the following issues.

• What is your preferred method of receiving information?
• What sources do you use to increase your understanding about Act? About the Commission’s enforcement activities in relation to the Act?
• Are you currently a member of an industry body or organisation? If so, please confirm which organisation/industry body.
• What additional information or guidance would you like to see the Commission make available in relation to its enforcement approaches to the Act? Which particular issues do you want more information about?

If the Commission elected to publish fuller details of its enforcement outcomes (for example copies of compliance advice, warnings and settlements albeit with commercially sensitive information removed) or detailed case studies would you find this useful as a source of guidance on the Commission’s enforcement approach to the Act?