Following on from our earlier Blog Post about proposed law changes to the CCCFA, further changes mean the legislation will now be phased in by 1 April 2021.

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.

Changes include:

  • 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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