Introduction and key legislation
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Credit usually involves someone borrowing money and agreeing to pay it back later with interest, fees or charges. Common forms of credit are home loans, credit cards, store cards and accounts, personal loans and pay-day loans. Other financial products or services that may be protected by consumer credit laws include lease contracts for the supply of goods, mortgages, guarantees, and terms contracts for the sale of land.
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The key consumer credit legislation is the National Consumer Credit Protection Act 2009 (Cth) (‘NCCP Act’), the National Consumer Credit Protection Regulations 2010 (Cth) (‘NCCP Regulations’) and the National Credit Code (NCC).
Credit contracts entered into between 1 November 1996 and 1 July 2010 are subject to the Uniform Credit Code (‘Old Code’). (for discussion of transitional arrangements, see ‘What credit contracts are regulated by the National Credit Code?’, below).
In addition, protections in the Australian Securities and Investments Commission Act 2001 (Cth) relating to misleading or deceptive conduct, unconscionable conduct and unfair contract terms, may also assist consumers of credit (see Chapter 7.2: Consumer protection laws).
Guidance on credit law can be found in the various regulatory guides published by the Australian Securities and Investments Commission (ASIC) (see www.asic.gov.au/rg).
Credit providers may also have obligations under one or more codes of conduct. These include the:
Banking Code of Practice (see ‘Banking Code of Practice’ in Chapter 5.10: Unauthorised transactions and ePayments Code). The Banking Code of Practice has been held to form part of the contract between a bank and customer;
Mortgage and Finance Association of Australia Code of Practice; and
Customer Owned Banking Code of Practice.
The Australian Financial Complaints Authority (AFCA) (see ‘Contacts’ at the end of this chapter) provides consumers and small businesses with fair, free and independent dispute resolution for financial complaints. AFCA considers fairness, good industry practice and industry codes, as well as legal principles, in determining disputes (see Chapter 5.10: Unauthorised transactions and ePayments Code).
Readers of this chapter may also be assisted by Chapter 5.2: Are you in debt?; Chapter 5.8: Mortgages, consumer leases and other finance products; Chapter 6.2: Buying or selling a house; Chapter 6.7: Buying a car; and Chapters 7.1–7.4, on consumers and contracts.
Introduction and key legislation
Chapter: 5.7: Understanding credit and finance
Contributor: Stephen Nowicki, Director of Legal Practice, Consumer Action Law Centre
Current as of: 1 September 2024
Law Handbook Page: 370
Next Section: Buy now pay later
