Review of consumer credit law 2009–2015

In 2014, consumer credit laws were amended to better protect consumers from irresponsible lending.

Some unscrupulous lenders had been:

• giving loans that borrowers would clearly struggle to repay
• misleading consumers about the real cost of a loan
• not disclosing essential information
• taking unnecessary security (eg, security over all of a customer’s present and future property for a small loan amount)
• using harsh repossession practices.

The purpose of the changes

The changes to the consumer credit laws sought to better protect borrowers by promoting responsible lending practices without placing unnecessary compliance costs on lenders who already have good systems in place.

The law changes targeted unscrupulous lenders by seeking to ensure that consumers are given the information they need to make informed decisions. The changes also boosted enforcement powers and penalties to crackdown on those lenders who breached the law.

What laws changed

The Credit Contracts and Financial Services Law Reform Bill made changes to a range of laws. The main law that changed was the Credit Contracts and Consumer Finance Act (CCCFA). The Credit (Repossession) Act 1997 was repealed, and revised and strengthened repossession laws were included in the CCCFA. Other Acts amended included the:

• Financial Service Providers (Registration and Dispute Resolution) Act 2008
• section 44 of the Personal Property Securities Act (PPSA) 1999
• Private Security Personnel and Private Investigators Act 2010 (to include a registration requirement for repossession agents).

When the new laws took effect

The Credit Contracts and Financial Services Law Reform Bill received Royal Assent on 6 June 2014, but many of the provisions in the Credit Contracts and Consumer Finance Amendment Act 2014 and the Financial Service Providers (Registration and Dispute Resolution) Amendment Act 2014 did not come into effect until 6 June 2015.