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Commerce Commission issues consumer credit fees guidelines

30 June 2017

The Commerce Commission has issued Consumer Credit Fees Guidelines, with the objective of providing guidance to lenders in setting credit fees.

The guidelines describe the Commission’s view on how lenders should approach setting their fees in order to comply with the Credit Contracts and Consumer Finance Act 2003, which requires credit fees charged by lenders to be reasonable.

The Commission says the guidelines are not exhaustive, and are not intended to be legally binding.

The Commission first issued draft guidelines in 2009 and 2010 but was not able to finalise them until the outcome of the long running case Commerce Commission v Sportzone Motorcycles Ltd and MTF Ltd [2016] NZSC 53, in which the Supreme Court made clear that credit fees should only cover transaction-specific costs.

Following that decision, the Commission issued updated draft guidelines and sought submissions on them.

“This has been a long process and we are grateful to the submitters. Once the Supreme Court backed the Commission’s approach to setting credit fees, the Commission had confirmation of its approach to the fees provisions and was in a position to offer clear guidance to credit providers,” Commission General Manager, Competition Antonia Horrocks says.

Last updated on the 16th September 2019