Changes to Rules for Quick Cash Loans

New consumer credit laws which took effect on 6 June 2015 include changes to the rules for quick cash loans. The law changes are documented in the Credit Contracts and Consumer Finance Amendment Act and have been introduced primarily for the purpose of protecting consumers from unscrupulous lenders. The new rules are focused on ensuring consumers are given all the information they need to make informed decisions before borrowing.

Lenders of quick cash loans are required to disclose key information about the terms of the loan agreement before it is signed. They also need to make their standard form contract terms, interest rates and fees publicly available, free of charge. Enforcement powers and penalties have been boosted for lenders who breach the law.

In addition to the law changes, new guidelines have been published to help lenders of quick cash loans use responsible lending practices to conduct their business. Responsible lending means providing credit that a borrower can afford, which also takes into account their circumstances and the effect the credit may have on them.

The new laws require lenders to act with care, diligence and skill in all dealings with consumers who apply for a loan. The law covers the duration of the loan starting from the point of advertising and continuing throughout the lifetime of the loan.

Responsible lenders must satisfy themselves that a quick cash loan will meet a borrower's objectives and requirements without causing financial hardship. Lenders rely on information the borrower provides unless there are reasonable grounds to believe the information is not reliable.

For more information see Consumer Protection