The Act requires lenders to act responsibly and helps protect you if you borrow money or buy products/services on credit, for personal use.

What types of credit does the CCCFA cover?

  • Personal loan
  • Mortgage
  • Using a credit card
  • Buying products/services on credit (hire purchase)
  • Borrowing money on an agreed overdraft

Note: AfterPay, PartPay and other 'buy now, pay later' credit contracts are currently NOT covered by the Act.

Why is the Act being changed?

To help protect New Zealanders from spiralling debt inflicted by huge interest rates and/or fees.

In 2017, the Minister of Commerce and Consumer Affairs, Kris Faafoi, requested a review of the previous government’s amendments to the CCCFA. As a result of the 2018 review, new legislation is being drafted.

What are the changes?

The following information is from the Ministry of Business, Innovation and Employment (MBIE) website - as of 10/4/2019:

  • A cost of credit cap on high-cost loans
    • Interest and fees on high-cost loans will be limited to 100% of the amount borrowed (the loan principal). For example, if you borrowed $500, you would never have to pay the lender back more than $1000, including all fees and interest.
  • Clearer responsible lending requirements, to increase compliance
  • Tougher penalties for breaking the law
  • More accountability for mobile traders
  • Easier enforcement to ensure fees are reasonable
  • Greater transparency and access to redress during debt collection

Do the changes go far enough?

Some say they don’t … New Zealand budget advisory charity, FinCap, is calling for tighter regulation. FinCap says without an interest rate cap (as well as a cost of credit cap), changes to the CCCFA will be almost meaningless. See related FinCap PDF

Complaints about Lenders

To help identify lenders breaching the Act, the Commerce Commission welcomes information from the public. Learn more:

Do you have High-interest Debt?

To help you pay off short-term, high-interest debt faster, Love My Money has simple yet powerful online tools, calculators and Journeys, including the ‘Get on Top of Short-term Debt’ Journey.

Find out how you can have a better relationship with your money: