finPOWER Connect Newsletter

Major changes introduced in CCCFA Amendments are:

• Hardship Provisions
• Can now apply if Account has been in default for up to 2 months (previously Account had to be current before they applied for Hardship).
• Some changes in Hardship timing.
• Infringement Notices
• Commerce Commission can now issue Infringement Notices rather than full Court proceedings.
• Commerce Commission can now take action for up to 3 years from the date they are notified of an issue. This changes from the previous limit of 3 years from date contact was entered into.
• Disclosure Requirements
• Earlier and better disclosure now required.
• Full Disclosure now required before loan is entered into (historically you had 5 days to provide full Disclosure documents).
• Disclosure now has to include (as well as previous requirements)
• Trading Name as well as Legal Name.
• FSP number.
• Dispute Resolution Scheme you are a member of as well as their contact details.
• Details on the Debtors rights to apply for Hardship.
• Where the contract includes a disabling device; full detail of the device, when it will be activated, how to use in an emergency.
• Standard Terms and Conditions must be publicly available
• Published on your website for each loan class if there are differences in the Terms for different Loan Classes.
• Notice on premise of the availability of a copy of the Terms and Conditions.
• Costs of Borrowing must be publicly available (interest rates and fee table)
• Published on your website for each loan class.
• Notice on premise of the availability of a copy of the Costs of Borrowing.
• Variations (Agreed and Unilateral)
• All exceptions now removed so all variations must be notified to the client.
• Variations must be notified within 5 days of the Variation occurring.
• Can be included in next Continuing Disclosure Statement.
• Credit Limit Changes
• Changes must be notified within 5 days.
• Can be included in next Continuing Disclosure Statement.
• Transfer Rights
• Where the ownership of a loan changes (except for securitisation).
• Within 10 days of the change of ownership you must notify the client of:
• The new lender and their contact details (Legal and trading name).
• FSP of the new lender.
• Dispute Resolution Scheme of the new lender.
• The impact the change of ownership will have on the borrower.
• Continuing Disclosure Statement
• After 6 June, Continuing Disclosure Statements must be sent at least 6 monthly.
• Must be every 45 days or less in the case of Credit Cards.
• Exclusion if the information is made available on a website.
• If there is no or incomplete Disclosure
• No interest of fees or other charges can be charged until complete disclosure is made, and then Interest and fees can only be charged from the date the full Disclosure was made.
• Default Interest
• Can only be charged on the overdue portion of the loan, not the entire balance.
• If a loan is called up because of the default, Default interest cannot be charged on the entire called up amount, only the original overdue portion.
• Repossession
• Now part of the CCCFA and under the authority of the Commerce Commission.
• Effective for any loans entered into on or after 6th June 2015.
• No Major changes to the Credit Repossessions Act.
• Repossession of certain goods:
• Certain goods, deemed Essential Goods cannot be repossessed.
• Any goods that Security is taken over must be fully and accurately identified i.e. serial numbers.
• Repossession Agents must be licensed.
• Repossession process changes:
• Repossession Warning Notice (formerly the Pre Possession Notice) must be issued 15 days prior to Repossession, and is only valid for 60 days from issue.
• Repossession Warning Notice must contain specific information:
• Hardship rights.
• Dispute Resolution Scheme details.
• Information on Voluntary Repossession.
• Repo Agent must provide:
• Copy of Credit Contract.
• Repo Licence.
• Post Repossession Notice (formerly the Post Possession Notice) must be issued 14 days after the repossession has occurred.
• Sale of Good Notice must be provided 15 days after the Post Repossession Notice.
• Statement of Account must be provided 7 days after the sale of the goods.
• Post Sale debt is frozen with no Interest or fees allowed to be charged to the account.
• Commerce Commission position is that this includes recovery and court fees.