Disclosure of information must be clear, concise and likely to be noticed by a reasonable person. It must not be misleading or deceptive about important things.
The CCCFA sets out the timing of disclosure, with various deadlines:
- initially before the credit contract is signed
- when guarantors sign
- if the interest rate or the contract changes by agreement or by the lender.
Electronic disclosure is fine if the borrower consents.
Lenders who do not make proper disclosure cannot enforce contracts against borrowers until disclosure is made.
See the following model disclosure statements, which are provided in the Act:
Ongoing disclosure for unpaid balances, interest debited, and payments must be made:
- every 45 days for revolving credit contracts
- at least every six months for all other credit contracts.
For credit cards, a minimum repayment warning, telling the borrower that if they only pay the minimum amount each month, they will pay more interest and it will take longer to pay their credit card debt off.
Additional disclosure must be made on changes to the credit contract or lease, or when the borrower requests it.
Lenders must make their standard terms and costs of borrowing publicly available via their website or on clearly displayed notices at their premises. This helps borrowers to compare the cost of borrowing and contract terms, and to shop around.
If you don’t get a copy of the disclosure statement and any of the terms and conditions of the contract, or it’s incomplete or incorrect, the following applies:
- the lender can’t enforce it or repossess any secured property
- you may be entitled to a range of statutory damages
- you have the right to cancel some or all of the contract
For contracts entered into on or after 6 June 2015 a lender cannot recover any of the costs of borrowing (interest and fees) for the period of non-compliance.