To protect people from excessive interest and fees on credit contracts, the Government has updated the Credit Contract and Consumer Finance Act (CCCFA).
The law change introduces limits on how much high-cost lenders can charge in interest and fees. High-cost loans are defined as loans where the annual interest rate is higher than 50%.
Truck shops and other mobile traders are now covered by the CCCFA. Like other lenders, they must follow responsible lending rules, including:
Lenders cannot ask you to pay back more than twice the amount borrowed (amount borrowed is also called the principal) in a high-cost loan entered into after 1 May 2020. For example, if you borrow $300 from a high-cost lender, you should not have to pay back more than $600 in total.
Other changes to the CCCFA mean:
If you do pay more, you can ask the lender for a refund.
Before borrowing from a high-cost lender, it’s a good idea to explore other options:
Talk to a free financial mentor at MoneyTalks — call 0800 345 123.
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