Prohibition on unexpired monthly fees in relation to small amount credit contracts
31C Prohibition on unexpired monthly fees in relation to small amount credit contracts
Requirement
A credit provider must not require or accept payment by the debtor under a small amount credit contract of an unexpired monthly fee.
A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.
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.
If a credit provider contravenes subsection (1) in relation to a small amount credit contract:
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
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
A person commits an offence if:
the person is subject to a requirement under subsection (1); and
the person engages in conduct; and
the conduct contravenes the requirement.
Criminal penalty: 100 penalty units.
Strict liability offence
A person commits an offence if:
the person is subject to a requirement under subsection (1); and
the person engages in conduct; and
the conduct contravenes the requirement.
Criminal penalty: 10 penalty units.
Subsection (5) is an offence of strict liability.
16 Subsection 72(3) of the National Credit Code (paragraph (a) of the note)
After “such as”, insert “family violence,”.
17 Paragraph 82(2)(b) of the National Credit Code
Repeal the paragraph, substitute:
either:
for a credit contract that is not a small amount credit contract—the interest charges and all other fees and charges payable by the debtor to the credit provider up to the date of termination; or
for a small amount credit contract—all fees and charges payable by the debtor to the credit provider up to the date of termination, excluding any unexpired monthly fee;
18 After paragraph 111(1)(i) of the National Credit Code
Insert:
section 31C;
19 Subsection 204(1) of the National Credit Code
Insert:
unexpired monthly fee: see subsection 31C(2).
Part 2—Consumer leases
National Consumer Credit Protection Act 2009
20 Subsection 5(1)
Insert:
consumer lease for household goods has the same meaning as in section 204 of the National Credit Code.
household goods has the same meaning as in section 204 of the National Credit Code.
21 At the end of section 134
Add:
Division 7 imposes requirements on a licensee who makes representations about providing credit assistance in relation to consumer leases for household goods. It also imposes requirements in relation to recording the preliminary assessment that a consumer lease is not unsuitable.
22 After subsection 140(1)
Insert:
If:
the consumer lease is a consumer lease for household goods; and
the consumer holds (whether alone or jointly with another person) an account with an ADI into which income payable to the consumer is credited;
the licensee must, in verifying the consumer’s financial situation for the purposes of paragraph 138(1)(d), obtain and consider information about each transaction on the account, and the balances of the account, during at least the immediately preceding period of 90 days.
Subsection (1A) does not limit paragraph (1)(c).
23 At the end of Part 3‑3
Add:
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