​This protects you when you borrow money or buy products or services on credit.

Intent of the Act

When you borrow money, the Credit Contracts and Consumer Finance Act (CCCFA) Act ensures you can make informed choices, know what you're agreeing to, and can keep track of your debts.

The CCCFA requires lenders to always act responsibly. It provides protection when you:

  • take out a personal loan or mortgage
  • use a credit card
  • borrow money on an agreed overdraft
  • buy products and services on credit (sometimes called hire purchase).

Credit Contracts and Consumer Finance Act (CCCFA)(external link) — Legislation.govt.nz

Hire purchase and buying on credit

Truck shops

Different laws apply to other types of contracts, e.g. gym memberships or quotes. Read your rights and definitions of common contract words and phrases:

Contracts and sales agreements

Your rights under the CCCFA

When the CCCFA applies

The CCCFA covers a range of transactions where money is loaned for personal use, including:

  • Consumer credit contracts — a contract where a borrower is given credit for personal use, e.g. through a mortgage, credit card, arranged overdraft, personal or cash loan, or pawnbroking pledge
  • Consumer leases — a lease contract where someone is leasing goods for personal use and either has an option to purchase the leased goods, or the term of the lease is over one year
  • Buy-back transactions — where a homeowner transfers their home (or an interest in their home) to a transferee, who typically pays their debts or gives them money. The former homeowner (the occupier) has the right to continue living in the home and to buy it back at some time in the future.

For business or investment lending, the only part of the Act that applies is the protection against oppressive behaviour by lenders.

The Act applies to people or businesses who:

  • provide credit, including insurance companies, finance or mortgage brokers, and paid advisers
  • lease out goods
  • operate or promote buy-back schemes.

AfterPay, PartPay and other "buy now, pay later" credit contracts are not currently covered by the CCCFA.

When the CCCFA doesn't apply

Credit contracts not covered by the CCCFA

A contract is not a consumer credit contract when:

  • the credit is for commercial or investment purposes — lenders may get a declaration from customers that the credit is for business or investment
  • the total amount to be paid is due within two months and the debt equals the sale price of the products or services
  • a borrower goes into overdraft without the lender’s prior agreement
  • the borrower is acting as a trustee of a family trust
  • it is a student loan under the Student Loan Scheme.

If a lender uses another reason to say the CCCFA does not apply, this might be a breach of the Fair Trading Act.

If things go wrong

Contact your lender

If it's difficult to keep up with your payments, ask about changing the agreement, eg to pay less each month. This is called applying for hardship.

If you think your lender has acted unfairly, try to resolve it with them first.

Report a lender to the Commerce Commission

The Commerce Commission is responsible for enforcing the CCCFA. Reports from the public help it identify lenders suspected of regularly breaking the rules.

Under the Credit Contract and Consumer Finance Act a lender must comply with disclosure obligations and determine affordability and suitability of the loan. Failure to do so can result in a refund of interest and fees and or damages to the borrower.

Making a complaint(external link) — Commerce Commission

The Commission can investigate lenders and take steps to ensure they stick to the rules by either:

  • giving advice on how to comply with the law
  • issuing warnings
  • taking the lender to court.

The Commission can't act on your behalf about your specific issue. If you can't resolve the issue with your lender, complain to the lender's dispute resolution scheme.

Complain to the lender's dispute resolution scheme

All lenders must be members of a dispute resolution scheme under the Financial Service Providers (Registration and Dispute Resolution) Act. These schemes are independent, which means they must be fair in resolving any disputes.

To find out which scheme a lender belongs to, search the Financial Service Providers Register.

Financial Service Providers Register(external link) — Companies Office