The Credit, Contracts and Consumer Finance Act requires lenders to act responsibly and helps protect you if you borrow money or buy products/services on credit, for personal use.
Why is the Act being changed?
To help protect New Zealanders from spiralling debt inflicted by huge interest rates and/or fees.
- Interest rate & cost of credit cap on high-cost loans
- Lenders will not be allowed to charge more than 0.8% interest and fees per day, for a loan
- A cost of credit cap will be introduced - with a limit on interest and fees charged on a high-cost loan, to 100% of the amount borrowed
- E.g. 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
Learn more about CCCFA changes
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