New Zealand Acts

CREDIT CONTRACTS AND CONSUMER FINANCE ACT 2003

- As at 12 April 2022
- Act 52 of 2003

TABLE OF PROVISIONS

   1.      Title

   PART 1 - Preliminary provisions

   2.      Commencement
   3.      Purposes
   4.      Overview
   5.      Interpretation
   6.      Meaning of credit
   7.      Meaning of credit contract
   8.      Meaning of buy-back transaction
   8A.     Meanings of associated and associated person
   8B.     Provisions affecting application of amendments to this Act
   8C.     Status of examples
   9.      Act binds the Crown

   PART 1A - Lender responsibilities
   Note

   9A.     Outline of Part
           Note
   9B.     Interpretation
           Note
   9C.     Lender responsibility principles
   9CA.    Records about inquiries made
   9D.     Proceedings for breach of legal obligations under other Acts
           Note
   9E.     Purpose of Responsible Lending Code
   9F.     Content of Responsible Lending Code
           Note
   9G.     Preparation and issue of Responsible Lending Code
   9H.     Responsible Lending Code comes into force by notice in Gazette
   9I.     Amendment of Responsible Lending Code
           Note
   9J.     Publication of standard form contract terms
   9K.     Publication of costs of borrowing
   9L.     Extended meaning of business premises

   PART 2 - Consumer credit contracts

           SUBPART 1 - Application

   10.     When this Part applies
   11.     Meaning of consumer credit contract
   12.     Investment purposes
   13.     Presumption relating to consumer credit contract
   14.     Effect of declaration
   15.     Certain contracts not consumer credit contracts
   15A.    Part does not apply to pawnbroking contract
   16.     Lease of goods treated as consumer credit contract
   16A.    Mobile trader credit sales treated as consumer credit contract

           SUBPART 2 - Required disclosure

   17.     Initial disclosure
   18.     Continuing disclosure
   19.     Content of continuing disclosure statement
   20.     Opening unpaid balance must not exceed closing unpaid balance of previous continuing disclosure statement
   21.     Continuing disclosure not required
   22.     Disclosure of agreed changes
   23.     Disclosure of changes following exercise of power
   24.     Request disclosure
   25.     Disclosure of guarantee
   26.     Disclosure of changes to guarantors
   26A.    Disclosure of transfer of rights of creditor under consumer credit contract
   26B.    Disclosure about dispute resolution schemes and financial mentoring services: hardship applications, arrears, credit declined, and complaints

           SUBPART 3 - Debtor's right to cancel

   27.     Right to cancel consumer credit contract
   28.     Notice of cancellation, return of property, and payment of cash price
   29.     Right of cancellation does not apply in certain situations
   30.     Effect of cancellation
   31.     Effect of credit sale cancellation

           SUBPART 4 - Disclosure standards and how disclosure is made

   32.     Disclosure standards
   33.     Assumptions
   34.     Creditor, etc, may voluntarily use model disclosure statement if not required to use mandatory form
   35.     How disclosure is made

           SUBPART 5 - Interest charges

   36.     End of day
   37.     Creditor to ensure that contract specifies annual interest rate or rates
   38.     Early debit or payment of interest charges prohibited
   39.     Limit on interest charges
   40.     Default interest charges

           SUBPART 6 - Fees

   41.     Unreasonable credit fee or default fee
   41A.    Records and reviews about how fees calculated
   42.     Establishment fees
   43.     Prepayment fees
   44.     Credit fees other than establishment fees and prepayment fees
   44A.    Default fees
   44B.    Compliance with Code is evidence that fees are not unreasonable
   45.     Fees or charges passed on by creditor

           SUBPART 6A - Provisions relating to debtors under high-cost consumer credit contracts
           Note
           Note

   45A.    Purpose of this subpart
   45B.    Outline of this subpart
   45C.    Meaning of high-cost consumer credit contract
   45D.    Power to increase interest rate that defines high-cost consumer credit contract
           Note
   45E.    Costs of borrowing must not exceed loan advance
   45F.    Certain high-cost consumer credit contracts with other creditors prohibited
   45G.    High-cost consumer credit contracts with certain repeat debtors prohibited
   45H.    Rate cap
   45I.    Compound interest prohibited
   45J.    Default fees
   45K.    Prohibition on avoidance
           Note
   45L.    Review of subpart

           SUBPART 7 - Payments

   46.     Crediting of payments
   47.     Dating and adjustments of debits and credits in accounts
   48.     Recovery of payments
   49.     Part prepayments
   50.     Debtor's right to full prepayment
   51.     Amount required for full prepayment
   52.     Rebate of insurance
   52A.    Rebate of repayment waiver
   52B.    Rebate of extended warranty
   53.     Termination of consumer credit insurance contract
   54.     Creditor's loss arising from full prepayment

           SUBPART 8 - Changes on grounds of unforeseen hardship

   55.     Changes on grounds of unforeseen hardship
   56.     Changes that can be made
   57.     Application may not be made in certain circumstances
   57A.    Obligations of creditor in relation to application
   58.     Changes by court
   59.     Creditor may apply for variation of change
   59A.    How notices may be given

           SUBPART 9 - Duty of directors and senior managers of creditors under consumer credit contracts
           Note

   59B.    Duty of directors and senior managers of creditors

   PART 3 - Consumer leases, credit-related insurance, and buy-back transactions of land

           SUBPART 1 - Consumer leases

   60.     Consumer leases
   61.     Presumption relating to consumer lease
   62.     Declaration concerning consumer lease
   63.     Application of disclosure provisions
   64.     Initial disclosure of consumer lease
   65.     Variation disclosure of consumer leases
   66.     Variation disclosure not required
   67.     Request disclosure for consumer leases
   68.     Amount payable on termination

           SUBPART 2 - Credit-related insurance, repayment waivers, and extended warranties

   69.     Restrictions on credit-related insurance, repayment waivers, and extended warranties
   70.     Disclosure of credit-related insurance, repayment waiver, or extended warranty

           SUBPART 3 - Buy-back transactions of land

   71.     Application of disclosure provisions
   72.     Initial disclosure of buy-back transaction
   73.     Independent legal advice must be given to occupier
   74.     Buy-back transactions involving buy-back promoter
   75.     Land cannot be dealt with without leave of court if initial disclosure not made or no independent legal advice given
   76.     Interest of occupier is caveatable interest
   77.     Variation disclosure of buy-back transactions
   78.     Variation disclosure not required
   79.     Request disclosure for buy-back transactions
   80.     Unreasonable buy-back fees or buy-back default fees
   81.     Fees or charges passed on by transferee
   82.     Unreasonable fees payable to buy-back promoter or associated person
   83.     No limit on Part 2

   PART 3A - Repossession of consumer goods underconsumer credit contract
   Note

           SUBPART 1 - Preliminary provisions
           Note

   83A.    Outline of Part
   83B.    References to consumer credit contracts include security agreements
   83C.    Application of Part
   83D.    Part does not create right to repossess, etc

           SUBPART 2 - Rules that apply before repossession
           Note

   83E.    Circumstances in which creditor can repossess consumer goods
   83F.    Duty to ensure goods are specifically identified
   83G.    Creditor must serve repossession warning notice on debtor and other persons before taking possession of consumer goods
   83H.    Debtor may voluntarily deliver consumer goods
   83I.    Rules relating to accessions (goods that are installed in, or affixed to, other goods)
   83J.    Effect of debtor's complaint or application on grounds of unforeseen hardship on creditor's rights to enforce credit contract
   83K.    Subsequent complaints

           SUBPART 3 - Disabling devices
           Note

   83L.    Use of disabling device
   83M.    Connection or use of disabling device in connection with certain goods prohibited

           SUBPART 4 - Rules that apply at time of repossession
           Note

   83N.    Creditor must allow debtor time to remedy default or at least 15 days to elapse
   83O.    Documents to be produced on entry
   83P.    Entry if occupier not present
   83Q.    Creditor must exercise right to enter premises in accordance with lender responsibility principles
   83R.    Creditor must not enter premises if complaint not resolved or unforeseen hardship application not decided
   83S.    Creditor must not enter residential premises at certain times
   83T.    Restrictions applying in relation to persons repossessing consumer goods

           SUBPART 5 - Rules that apply after repossession of consumer goods
           Note

   83U.    Interpretation
   83V.    Notice to be given to debtor, guarantor, and other creditors after repossession of consumer goods
   83W.    Creditor must not sell consumer goods until 15 days after post-repossession notice
   83X.    Consequences of selling within 15 days of post-repossession notice
   83Y.    Creditor must offer consumer goods for sale
   83Z.    Rules relating to sale by creditor
   83ZA.   Debtor may obtain valuation of consumer goods before sale
   83ZB.   Debtor’s right to reinstate credit contract
   83ZC.   Consequences of reinstating credit contract
   83ZD.   Debtor’s right to introduce buyer
   83ZE.   Debtor’s right to settle credit contract
   83ZF.   Debtor’s right to force sale
   83ZG.   Disposal of consumer goods to purchaser for value and in good faith
   83ZH.   Extinguishment of creditor’s security interest and subordinate security interests on sale
   83ZI.   Creditor to give statement of account to debtor, guarantor, and other interested persons
   83ZJ.   Distribution of surplus
   83ZK.   Surplus may be paid into court
   83ZL.   Debtor’s, etc, right to recover surplus
   83ZM.   Limit on creditor’s right to recover from debtor

           SUBPART 6 - Prohibitions relating to security interest over certain consumer goods
           Note

   83ZN.   Consumer credit contract may not provide for security interest over certain consumer goods
   83ZO.   Contravening provision of no effect
   83ZP.   Exclusion for fixtures

           SUBPART 7 - Miscellaneous provisions
           Note

   83ZQ.   Service of notices
   83ZR.   Part does not limit application of rules relating to conduct of servants or agents

   PART 4 - Enforcement and remedies

           SUBPART 1 - Preliminary provisions

   84.     Compliance programmes
   85.     Jurisdiction of High Court
   86.     Jurisdiction of District Court
   87.     Jurisdiction of Disputes Tribunal
   87A.    Jurisdiction of dispute resolution schemes

           SUBPART 2 - Statutory damages

   88.     Creditors, creditors' agents, lessors, transferees, and buy-back promoters liable for statutory damages
   89.     Amount of statutory damages
   90.     Enforcement of statutory damages
   91.     Court may reduce statutory damages
   92.     Guidelines for reducing statutory damages

           SUBPART 3 - Orders, injunctions, and prohibited enforcement

   93.     Court's general power to make orders
   94.     Court orders
   94A.    Court orders in relation to repossessions
   95.     Miscellaneous provisions concerning court's general power to make orders
   95A.    Court may reduce effect of failure to make disclosure
   95B.    Guidelines for reducing effect of failure to make disclosure
   96.     Injunctions
   97.     Injunctions restraining conduct of particular kind
   98.     Interim injunction
           Note
   98A.    Compliance orders
   98B.    Order to disclose information or publish advertisement
   99.     Enforcement of consumer credit contract prohibited
   99A.    Enforcement of rights of repossession, etc, prohibited
   99B.    Enforcement prohibited if creditor unregistered
   100.    Enforcement of guarantee prohibited
   101.    Enforcement of consumer lease prohibited
   102.    Enforcement of buy-back transaction prohibited

           SUBPART 4 - Offences

   102A.   Infringement offences
   103.    Other offences
   104.    Conviction for 2 or more offences
   105.    When proceedings may be commenced
   105A.   Infringement fee, etc, defined
   105B.   Infringement offence alleged
   105C.   Issue of infringement notice
   105D.   Procedural requirements for infringement notices
   105E.   What Commission does with infringement fees
   105F.   Regulations relating to infringement offences

           SUBPART 5 - Defence

   106.    Reasonable mistake defence
   107.    Relevance of compliance programme

           SUBPART 5A - Pecuniary penalties
           Note

   107A.   Pecuniary penalties
   107B.   Proceedings for pecuniary penalties
   107C.   Relationship between pecuniary penalties and criminal liability
   107D.   Restriction on indemnities
   107E.   Restriction on insurance

           SUBPART 6 - Prohibition on certain creditors, lessors, transferees, and buy-back promoters

   108.    Power to order certain persons not to act as creditors, lessors, transferees, or buy-back promoters
   109.    Who may apply and nature of order
   110.    Costs

           SUBPART 7 - Application of Commerce Act 1986 and provisions relating to Commerce Commission

   111.    Role and functions of Commission under this Act
   112.    Commission's rights to appear and adduce evidence
   113.    Application of Commerce Act 1986
   114.    Additional proceedings
   115.    Disposal of things seized
   116.    Court order for disposal of things seized to be suspended on conviction
   116AAA. Requirement for annual return

           SUBPART 8 - Miscellaneous
           Note

   116A.   Directors and senior managers may also be liable for statutory damages or compensation

   PART 5 - Reopening of oppressive credit contracts, consumer leases, and buy-back transactions

   117.    Application of Part
   118.    Meaning of oppressive
   119.    Collateral contracts and linked transactions
   120.    Reopening of credit contracts, consumer leases, and buy-back transactions
   121.    Refusal to agree to early termination, variation, or waiver
   122.    Reopening credit contracts involved in arrangement
   123.    Time and circumstances relevant to reopening credit contracts, consumer leases, or buy-back transactions
   124.    Guidelines for reopening credit contracts, consumer leases, and buy-back transactions
   125.    When reopening proceedings may be commenced
   126.    Evidence
   127.    Power of court on reopening credit contract, consumer lease, or buy-back transaction
   128.    Costs in consumer cases
   129.    Persons who share in profits or have beneficial interest in reopened credit contract, consumer lease, or buy-back transaction
   130.    Time of exercise of court's powers
   131.    No limit on sections 41, 80, and 82

   PART 5A - Certification and fit and proper person requirements
   Note

   131A.   Interpretation for this Part
           Note
   131B.   When person needs to be certified
   131C.   Exemptions from need for certification
   131D.   Prohibitions on holding out that person is certified
           Note
   131E.   Commission may issue certification
   131F.   Application for certification
   131G.   When certification must be issued
   131H.   Procedural requirements
   131I.   Notice of decision
   131J.   Commission must send certification details to Registrar
           Note
   131K.   Conditions of certification
   131L.   When Commission may impose conditions
   131M.   Certified person may apply for variation of conditions
   131N.   Procedure for variation of conditions
           Note
   131O.   Duration of certification
   131P.   When Commission may suspend or cancel certification
   131Q.   Procedural requirements on suspension or cancellation of certification
           Note
   131R.   Duty to notify changes
           Note
   131S.   Appeals against certification decisions
   131T.   Fees, charges, and costs in connection with this subpart

   PART 6 - Miscellaneous provisions

   132.    Provisions relating to assignment of credit contracts, consumer leases, or buy-back transactions
   132A.   Disclosure about debt collection
   133.    Changes, deferrals, or postponements under credit contracts and consumer leases
   134.    Right to set-off
   135.    No contracting out
   136.    Application of law relating to illegal contracts
   137.    Conflict of laws
           Note
   137A.   Class declarations about credit contracts and consumer credit contracts
   137B.   Declarations about particular arrangements or facilities
   137C.   General provisions about all declarations
   138.    Regulations
   139.    Acts amended
   140.    Repeal of Credit Contracts Act 1981 and Hire Purchase Act 1971
   141.    Transitional provision
   141A.   Application, savings, and transitional provisions relating to amendments to Act
   142.    Election for Act to apply
   143.    Continuing application of Credit Contracts Act 1981 and Hire Purchase Act 1971
           SCHEDULE 1AA
           SCHEDULE 1
           SCHEDULE 2
           SCHEDULE 3
           SCHEDULE 3A
           SCHEDULE 3B
           SCHEDULE 4