If you lend to consumers or take security over consumer goods you must make your standard form contract terms and costs of borrowing for certain loans available publicly.
If you have a website, you must prominently and clearly display a copy of the standard form contract terms and costs of borrowing on that site.
If you have business premises that are accessible to the public, you must prominently and clearly display on those premises a notice stating that a copy of the standard form contract terms and costs of borrowing is available on request (free of charge).
Your business premises includes, in this instance, a vehicle, stand or stall where goods are offered or displayed for sale, or from which goods may be ordered and sold on deferred payment terms. This means that mobile premises, such as truck shops, are “business premises” at which standard form contract terms need to be displayed.
If you receive a request from anyone for a copy of your standard form contract terms and/or costs of borrowing, you must immediately supply a copy free of charge. This applies regardless of whether you have already publicly displayed the information on your website or at your premises. A copy can be provided by electronic communication, such as email, if the requestor agrees.
If you use standard form contract terms for consumer credit contracts or credit contracts secured over consumer goods, you must make these terms publicly available on your website (if you have one) and at your business premises.
This includes standard form contract terms for:
consumer credit contracts
credit contracts secured over consumer goods (including security interests)
buy-back transactions
repayment waivers and extended warranties, when these are taken out in connection with the contract.
You do not have to publicise terms for consumer leases or business loans if these are not secured over consumer goods.
What are standard form contract terms?
Standard form contract terms are some usual or commonly used loan terms that lenders offer for a type of loan, rather than drafting entirely new terms for each loan.
If you offer loans on pre-arranged terms and do not draft entirely new terms for each loan, those terms are likely to be standard form contract terms.
You might use a set of terms without amendment for every loan in a class of loans. A printed set of standard terms and conditions that are not open to negotiation will likely be standard form contract terms which must be published.
You might use a set of standard terms as a starting point for negotiating loans with individual borrowers and some terms may be amended for each final loan agreement. The standard terms are likely to be standard form contract terms which must be published, even though some of the terms are amended to meet the needs for individual borrowers.
You might also have a set of terms that you always include in a loan agreement even when the majority of other terms in the loan agreement are negotiated and drafted to meet the needs of individual borrowers. The set of non-negotiable terms are likely to be standard form contract terms which must be published. What matters is that you commonly use the terms, even if from time to time you agree to change the terms, or mix standard terms up with newly created terms.
Costs of borrowing
You must also make information publicly available about the costs of borrowing you charge on each class of:
consumer credit contracts
credit contracts secured over consumer goods
What are costs of borrowing?
The information you need to make available for each class of contract is:
all applicable credit fees
all applicable default fees
all interest charges, including annual rates of interest, and default interest charges.
Credit and default fees
You must include description of the credit and default fees including when each fee is payable and the amount (or maximum amount) of each fee (or the method of calculating the fee).
Interest rates
You must include:
you must express annual interest rates as a percentage
if there is more than one rate, you must describe how or when each rate applies
if an annual interest rate is fixed for a period, the period during which the annual interest rate is fixed
if an annual interest rate or default interest rate is variable or adjustable, a statement to that effect.
The interest rate or rates must:
be the rate or rates that are ordinarily available to borrowers under that class of credit contracts
be the current annual interest rate or rates (if the rate is variable or adjustable)
if the interest rate is expressed as a range, must be accompanied by a brief description of the factors that the lender may consider to determine the specific interest rate for particular classes of borrower (eg, “between 5 and 10%, depending on the borrower’s credit history”).
If a default interest rate applies because of a default in payment or the credit limit being exceeded, you must make the same information available for that rate.
