Q: Who must be certified?

A: If you or your company is a provider of consumer credit (lender), including through pawnbroking contracts, consumer leases, BNPL contracts or a mobile trader, you must be certified under Part 5A of the Credit Contracts and Consumer Finance Act 2003 (CCCF Act) by the Commerce Commission (Commission).

To gain certification, sole traders, and directors and senior managers of companies and other trading entities, must satisfy the Commission that they are fit and proper persons to hold their positions. The Commission must be satisfied that these individuals are financially sound, honest, reputable, reliable and competent to perform their role.

You are a lender if:

  • you have a contract which allows a person to defer payment of a debt, incur a debt and defer payment, or to purchase goods or services and defer payment
  • the contract allows you to charge interest or credit fees or take a security interest
  • the borrower is a natural person who will use or intends to use the credit wholly or predominantly for personal, domestic or household purposes and you are
  • in the business of providing credit – although lending does not have to be your only business or main business
  • in the practice of providing credit as part of your business (such as a car dealer)
  • entering into credit contracts on behalf of someone else.

You are a mobile trader if:

  • in person and not at fixed premises, you offer or agree to supply consumer goods to someone under a credit sale, or a company associated with you provides finance to buy goods under a credit sale. A credit sale is a sale of goods or services where payment of the price is wholly or partly deferred. For example, if a person buys a laptop from your truck on July 1st and agrees to pay it off at $20 per week, then it is a credit sale.

You are a pawnbroker if:

  • you lend money to a borrower (may also be referred to as a pledgor) who, in return, pledges goods to you as security for the loan (that is, you take possession of the goods but not ownership)
  • you are not a secondhand dealer or the employee of a secondhand dealer and pawnbroker.

You are a consumer lessor if:

  • you are in the business of leasing goods to consumers for predominantly personal, domestic or household purposes; and
    • the total payments the lessee has to make under the lease is roughly the same (or more than) the cash price of the lease goods; and/or
    • the lessee has an option to buy the goods for nothing extra, a nominal amount, or well below what they’re worth at the end of the lease.

You are a BNPL provider if you enter into a credit contract:

  • that provides credit to enable the debtor to purchase goods or services offered by a third party;
  • where the debtor is a natural person;
  • where the credit is used, or intended to be used, wholly or predominately for personal, household or domestic purposes; and
  • in respect of which the creditor or any one of their associated persons–
    • is paid fees by the third party or payment services provider; or
    • is required to pay an amount to the third party that is less than the amount to be repaid by the debtor.

Q: I am a pawnbroker, do I need to be certified?

The High Court in its judgment dated 30 April 2024 has confirmed that typical pawnbroking contracts have the necessary elements to be considered both credit contracts and consumer credit contracts.   If you provide consumer credit through a pawnbroking contract, you must be certified under Part 5A of the Credit Contracts and Consumer Finance Act 2003 by the Commission.

Q: I am a consumer lessor, do I need to be certified?

A consumer lessor must be certified under Part 5A of the Credit Contracts and Consumer Finance Act 2003 by the Commission. You are a consumer lessor if:

  • you are in the business of leasing goods to consumers for their personal or household use; and
    • the total payments the lessee has to make under the lease is roughly the same (or more than) the cash price of the lease goods; and/or
    • the lessee has an option to buy the goods for nothing extra, a nominal amount, or well below what they’re worth at the end of the lease.

Q: I am a Buy Now Pay Later provider, do I need to be certified?

From 2 September 2024, BNPL contracts are declared to be consumer credit contracts and providers must comply with all the obligations of a lender under the Credit Contracts and Consumer Finance Act and the Credit Contracts and Consumer Finance Regulations, unless an exemption applies.

Please refer to Buy Now Pay Later Guidelines for further information including the exemptions applying to BNPL contracts.

Q: How do I apply to be certified?

A: You will need to apply on the FSPR by selecting ‘creditor under a credit contract - consumer credit contract’ or ‘mobile trader’ as a service you wish to provide. Selecting one of these will trigger the certification process and an email will be sent informing you of how you can make the required payment and the forms you will need to complete.

Q: When do I need to apply to be certified?

A: Certification became compulsory from 1 October 2021.

From this date you must be certified by the Commission before you start offering consumer credit or mobile trader services.

Q: What happens if am a mobile trader and provider of consumer credit?

A: You will need to select both services when you apply on the FSPR but you will only need to pay for one service.

Q: How much does it cost to be certified?

A: The processing fee that the Commission charges when people apply for fit and proper certification is $1055 (excluding GST) per person per entity and certification generally lasts for 5 years. The fee works out to be $211 annually and is due to be reviewed once the certification regime has been in place for three years. In the same way that the government made the legislative changes, they also came up with this fee which is set out in the Credit Contracts Consumer Finance (Certification) Amendment Regulations 2021. The way in which the fee is calculated means that the Commission will recover the costs associated with reviewing each application (including the cost of staff, systems and overheads) however, the Commission does not make a profit from charging this fee.

We will not begin to process your application until the fee has been paid in full.

Q: Is the fee refundable?

A: Once we begin to process your application, the fee is non-refundable, even if you withdraw your application or we decline your application. We will not begin to process your application until the fee has been paid.

Q: How long does certification last for?

A: Generally certification lasts for 5 years. However, we may impose a shorter certification period if  we consider that is appropriate.  If we intend to do this, we will communicate this to you and give you an opportunity to respond before we make a final decision.

Q: Can I access the application form before I apply for certification?

A: The application form is sent out with payment instructions when you apply for certification. A sample version is available on our website. The sample form is for information only and cannot be submitted as part of your application.

Q: How do I know if I am a ‘senior manager’?

A: A senior manager is a person other than a director whose position allows him or her to exercise significant influence over the way a business is managed or administered. Who is a senior manager depends on the particular circumstances of your business, but a senior manager may be someone who implements and has input into the way the board exercises its powers and is engaged in decision making, regardless of whether they make the final decision.  You can find more information about who is a senior manager in our Fit and Proper Person certification guidance.

Q: What happens if I am the director of or senior manager at multiple entities?

A: Each entity will need to apply for certification and will need to pay the certification fee for each director and senior manager.

Q: What happens if I resign from my role as director or senior manager part way through the certification process?

A: If you apply for certification and then a director or senior manager resigns part way through, you will not get a refund of the fee you have paid.

Q: What happens if a director or senior manager of a certified lender resigns?

A: This is a prescribed change that could affect your certification. Please refer to the question below titled What are the prescribed changes that could affect my certification? to understand the steps you must take to notify the Commission.

Q: What happens if my application is declined?

A: If we intend to decline your application, we will notify you and explain why and give you at least 10 working days to respond with written submissions. We will consider your submission when making our final decision. If we refuse your application for certification, we will let you know the decision and why we reached it. You can appeal to the District Court if you do not agree with our decision to refuse your application.

Because you need to be certified to be registered on the FSPR, non-certification will lead to deregistration of your consumer credit and/or mobile trader service. At this point you will no longer be able to offer consumer credit or mobile trader services. The Commission accepts that you may need to take some reasonable steps to comply with these requirements and to ensure that the interests of existing borrowers are met.

A list of lenders and mobile traders where certification has been refused is available on our website.

Q: Where lenders intend to stop providing consumer credit, do they still need to be certified?

A: If you are no longer entering into new consumer credit contracts but require an ability to vary existing consumer credit contracts, you will be required to stay certified until your loan book is closed.

Q: What changes in certification could affect my certification?

A: You must notify the Commission of any prescribed change that could affect your certification within 10 working days of knowing of the change.  The full list of changes that must be notified are set out in regulation 25 of the Credit Contracts and Consumer Finance Regulations 2004, and are detailed in our Fit and Proper Person certification guidance.

You should familiarise yourself with the relevant changes and have processes in place to ensure you identify them and communicate them to us within the time frame specified.

We will assess whether the changes affect our decision to certify you. We may ask you for more information to help make that assessment. We may suspend or cancel your certification if we consider any change means any one of your directors or senior managers is no longer fit and proper to perform their role.

Q: How do I notify prescribed changes to the Commission?

A: You can notify the Commission by emailing certification@comcom.govt.nz

You may also use the Notification of Prescribed Change Form.

The prescribed changes are listed in our Fit and Proper Person certification guidance.

Q: What happens if I don’t notify changes?

A: Failure to notify the Commission may result in a court ordering you to pay up to $600,000 for a corporate entity or up to $200,000 for an individual.

Q: Can certification be suspended?

A: We may suspend your certification while we investigate information about a material breach of a condition, or any information that leads us to believe any one of your directors or senior managers is no longer fit and proper to perform their role.

If we intend to suspend your application, we will notify you and explain why and give you at least 10 working days to respond with written submissions. We will consider your submission when making our final decision. If we suspend your certification, we will let you know the decision and why we reached it.

If your certification is suspended, then you must not enter into new consumer credit loans nor vary existing consumer credit loans for as long as the suspension remains in place.

Q: Can certification be cancelled?

A: You may request that certification is cancelled, for example if you are no longer going to be providing consumer credit.

We may also cancel your certification if, among other things:

  • you materially breach a condition of your certification; or
  • we are satisfied any one of your directors or senior managers is no longer fit and proper to perform their role; or
  • you become subject to an insolvency event, become incapacitated, or cease to exist.

If we intend to cancel your certification, we will notify you and explain why and give you at least 10 working days to respond with written submissions. We will consider your submission when making our final decision. If we cancel your certification, we will let you know the decision and why we reached it.

If you are required to be certified but are not, non-certification will lead to deregistration from the FSPR of your consumer credit and/or mobile trader service. At this point you will no longer be able to offer consumer credit or mobile trader services.

A list of lenders and mobile traders where certification has been cancelled is available on our website.

Q: Is anyone exempt from being certified?

A: Lenders or mobile traders may be exempt from certification if they are already licenced or authorised by the Financial Markets Authority or Reserve Bank of New Zealand or by regulations.

A list of lenders and mobile traders exempt from certification is available on our website.

Q: What happens if I provide consumer credit and/or mobile trading services without being certified?

A: There are serious consequences if the requirements of the certification regime are breached. The court may order you to pay up to $600,000 for a corporate entity or up to $200,000 for an individual.

For more information, please download and read our Fit and Proper Person certification guidance.

For questions around technical and system issues, contact the FSPR Help Centre. You can also find helpful information about certification on FSPR's website.

For all other queries, contact certification@comcom.govt.nz.