The Regulations for the upcoming Credit Card reforms have been
finalised in anticipation of the 1 July 2012 implementation
The Regulations amend the existing National Consumer Credit
Protection Regulations and support the reforms introduced earlier
this year through the National Consumer Credit Protection Amendment
(Home Loans and Credit Cards) Act (Credit Cards
For credit providers there will be significant implementation
and ongoing costs and operational requirements involved with the
reforms. In addition, a failure by a credit provider to comply with
the requirements of the Credit Cards Act carries both civil and
The key target areas of the reforms identified in the
prescribe the Key Facts Sheet for credit card application forms
and the circumstances in which an application form may include an
out-of-date Key Facts Sheet
refine the definition of credit limit increase invitations
introduce a requirement for credit providers to notify
consumers when their account has exceeded its credit limit
define requirements for the giving and withdrawal of consents
and agreements made under the Credit Cards Act, and
require lenders to inform consumers about the implications of
only making minimum repayments through a personalised minimum
repayment warning on monthly statements.
Issues which have identified by industry as needing further
clarification following the release of the Regulations include:
whether consumer consents to receive credit limit increase
invitations can be bundled with other consents such as privacy and
electronic communication consents
the timing around when the credit provider becomes aware of
accounts exceeding their credit limit.
The requirement to provide Key Facts Sheets will only apply to
new credit cards applied for from 1 July 2012. However, the
requirement to provide the Minimum Repayment Warning on monthly
statements will apply for both new and existing cards.
The warning and details will need to appear on the statements in
the following form:
Minimum Repayment Warning: If you make only the
minimum payment each month, you will pay more interest and it will
take you longer to pay off your balance. For example:
If you make no additional
charges using this card and each month you pay ...
You will pay off the Closing
Balance shown on this statement in about ...
And you will end up paying an
estimated total of ...
Only the minimum payment
[total interest 1]
[total interest 2], a saving of
Having trouble making repayments? If you are
having difficulty making credit card repayments, please contact us
on [phone number]. We may be able to assist you.
DibbsBarker has a dedicated financial services team who know the
sector well, with particular legal expertise in credit law and
business banking. Our team are recognised for their creative
approach to finance and banking issues, combining proven technical
expertise with sound commercial acumen.
Our recent work for a number of clients in assisting with the
licensing and compliance obligations arising out of the NCCP
Reforms means the team at DibbsBarker is well placed to provide you
with any assistance or advice you require regarding the Credit Card
reforms or the NCCP.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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