The Commission’s previous fee guidelines were published in 2010 and remained in draft pending the outcome of the long-running litigation CC v Sportzone/MTF (available below). The Supreme Court judgment was issued in May 2016 and amendments to the Credit Contracts and Consumer Finance Act 2003 (CCCFA) came into force in June 2015. So the Commission has decided to provide updated guidance to lenders.
The draft guidelines describe the Commission’s view on how lenders should approach setting their fees in order to comply with the Act. They set out the general principles that lenders should take into account and give examples of how these principles might apply in practice. They also give guidance on whether or not particular types of costs can be included in fees.
The Commission called for submissions on the guidelines in September. We will review all feedback and then finalise the guidelines early in 2017.
Note: 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 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.