Responsible Lending Code
Intent of the Code
To offer guidance to lenders on the lender responsibility principles in the Credit Contracts and Consumer Finance Act (CCCFA). The aim is to stop consumers signing up for loans they cannot afford.
Download the 64-page code, or read the summarised lender responsibility principles on this page:
What lenders must do
Your rights under the Responsible Lending Code
The Code is a set of guidelines for lenders, including mobile traders like truck shops. Examples include:
- clearly explaining the cost of credit in advertising
- checking your financial position before finalising a loan or payment plan
- acting ethically if you fall behind on repayments.
In respect of high-cost loans, all lenders, including mobile traders, must also adhere to limits on interest and fees set out in the Credit Contract and Consumer Finance Act (CCCFA):
- They cannot ask you to pay back more than twice the amount borrowed.
- They cannot charge compound interest.
- They cannot charge more than 0.8% of the unpaid loan balance in interest and fees per day when averaged across the loan term.
- Default fees for missed payments must be $30 or less.
Your rights as a consumer — as a borrower or as a loan guarantor — are set out in the CCCFA.
When the Responsible Lending Code applies
It applies to all consumer credit transactions apart from consumer leases.
When things go wrong
If you think a lender has broken the Code, you can make a complaint under the CCCFA. See If things go wrong on the CCCFA page:
Credit Contracts and Consumer Finance Act