The Commerce Commission has today released draft guidelines which inform creditors and consumers about the Commission's approach to enforcing the fees provisions under the Credit Contracts and Consumer Finance Act. The Commission is consulting on the guidelines before they are finalised.

The guidelines represent the Commission's current views about the fees provisions under the Act and will also provide guidance to creditors on what the Commission considers to be the characteristics of a reasonable establishment, credit and default fee.

In the absence of judicial precedent, the Commission considers this guidance should provide further clarity and enable the credit industry to set fees that are consistent with the approach taken by the Commission thereby avoiding being investigated by the Commission.

The draft guidelines are available for download from the Commerce Commission website www.comcom.govt.nz under Consumer Credit/Consumer Credit Publications

Any feedback on the draft guidelines should be sent to creditfeesubmissions@comcom.govt.nz by 1 May 2009.

The Commission will publish the guidelines once they have been finalised.

Background

The Credit Contracts and Consumer Finance Act applies to consumer credit contracts entered on or after 1 April 2005. The Act sets rules relating to the disclosure of information and the reasonableness of credit fees and default fees.