The Credit Contracts and Consumer Finance Amendment Act 2014 underwent its final reading this week and is expected to receive royal assent on 4 June 2014. The Amendment Act introduces significant changes to the Credit Contracts and Consumer Finance Act 2003 (the CCCFA).
When do the amendments come into force?
The commencement date for these amendments has not yet been announced but all provisions (as well as the new Responsible Lending Code) must come into force over the next 12 months. We will keep you updated as information on transitional periods is announced.
We have set out a summary of the key amendments, and relevant issues for lenders, in the table below.
Do these amendments overlap with recent changes to the Fair Trading Act (FTA)?
The recent changes to the FTA, introduced under the Fair Trading Amendment Act 2013 (see our previous Update) will be implemented separately.
Accordingly, under the FTA, lenders, insurers and suppliers of goods on credit must ensure that:
by 17 June this year extended warranty agreements and direct sales agreements have been updated to reflect the new disclosure and cancellation obligations in the FTA; and
by 17 March next year consumer credit contracts (and any other standard form consumer contracts) do not include any “unfair contract terms”.
Where to from here?
If your business involves the entry into consumer credit contracts, you will have to update your practices and processes to comply with the changes to the CCCFA. To assist you with this process, Bell Gully has established a dedicated CCCFA Team. Our team will be co-ordinating a programme over the next 12 months to ensure you are ready when the changes come into force. This will include the distribution of a compliance checklist to help you determine what you need to change, seminars and ongoing alerts on the implementation of the key amendments to the CCCFA, information on transition periods, consultation documents and guidelines and a detailed analysis of the Responsible Lending Code (probably the key change to the CCCFA).
CCCFA Amendment Act 2014
Click here to view table.