Consumer credit law changes introduced to Parliament

Consumer Affairs Minister Craig Foss today announced the introduction of a Bill making wide-ranging changes to consumer credit and repossession

“The Credit Contracts and Financial Services Law Reform Bill is the biggest overhaul of consumer credit law in a decade,” says Mr Foss.

“The changes introduced today represent a crackdown on unscrupulous lenders who prey on desperate people and leave them and their families trapped in a spiral of debt.

“The changes will usher in an era where lenders must act responsibly, where consumers have the information they need and where there are significant consequences for those who breach the law.

“Rewriting the rules for consumer lending was one of the Government’s pre-election promises and forms an important part of the Business Growth Agenda, which aims to boost confidence in our financial markets. I’m pleased today to say the Government is delivering on those promises,” says Mr Foss.

The Bill introduces a wide range of changes, including:

• Lenders will have to take responsibility for the likely effect of the credit they provide
• Lenders will only be able to lend money when the loan meets the borrower’s requirements and objectives, and the payments required won’t cause substantial hardship for the borrower
• Lenders may be banned from the industry if they don’t lend responsibly
• A new Code of Responsible Lending will be introduced
• There will be better controls against misleading, deceptive or confusing advertising
• Consumer goods cannot be repossessed unless they are specifically identified in the credit contract
• Licensing of repossession agents and employees.