CCCFA - revised draft credit fees guidelines released

The Commerce Commission has released revised draft guidelines outlining its enforcement approach to credit fees under the Credit Contracts and Consumer Finance Act (CCCFA).

The draft guidelines, which were revised following receipt of submissions on an earlier version circulated in 2009, focus on section 41 of the CCCFA, which prohibits unreasonable credit and default fees. The guidelines also refer to sections 42 and 44, which set out rules for determining whether establishment, credit and other default fees breach section 41.

Commerce Commission Fair Trading Manager Graham Gill said that "The guidelines will be updated as court precedent is available to provide further clarification on these sections of the CCCFA. The Commission has a number of credit fees cases currently before the Courts that are likely to assist with this. An aspect of section 44 which particularly requires clarification is the application of 'reasonable standards of commercial practice'. The Commission is going to work with the credit industry to try and establish some agreed approaches".

Click here to read the draft guidelines.

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