Credit Rights

Credit Contracts Act 1981
The Act covers loan and hire purchase contracts which have a value not exceeding $250,000. If the customer has several loans with the same finance company the $250,000 rule will apply to the total of those loans. There must be a charge for providing the credit (e.g., the amount repaid by the customer must exceed the cash price of the goods).
The Act sets out information that must be in the contract (the rules about disclosure).

The Lending Institution or Person must state (disclose):

  • the cash price of the goods
  • the amount of credit
  • the total cost of credit
  • the finance rate
  • name and address of the creditor
  • the rate, frequency, and number of instalments, when payment is due, and who payment is made to
  • the right to cancel within three working days, and
  • all other terms of the contract.

The Act also sets out the penalties for failure to disclose.