The following information was sourced from www.creditcode.gov.au
Introduction
As Purple Finance provides money to purchase goods and services, or to lease goods then we are providing credit to borrowers (you or the debtor).
The Consumer Credit Code (the Code) applies as we charge for the credit we provide and our customers are individuals who use it mostly for personal, household or domestic purposes.
The following checklist sets out our obligations at all stages of the credit contract's life including what we need to do before we give the contract to you, what must be included in the contract, what must be included in account statements, advertising restrictions and what we need to do to enforce or change the contract.
It is important to remember that this is only a broad guide covering common credit and lease contracts.
Credit
Under the Code, any credit arrangement between Purple Finance and a debtor must follow these steps:
- A Pre-contractual statement and an Information statement is given to the debtor
- A written contract is signed by us and the debtor
- Regular account statements are sent to the debtor
- Any changes to the contract, advertising relating to the contract, or enforcement proceedings must follow the terms set out in the Code.
Before the contract is made
Before we enter a contract, we need to provide the debtor with a Pre-contractual statement and an Information statement. These statements can form part of the actual credit contract or be provided separately. Both documents should be clearly understandable and be in not less than 10 point type.
It is an offence to pressure a debtor into signing a contract or to visit a debtor's house to sign a contract without prior invitation.
Pre-contractual Statement
The first page of the Pre-contractual statement must disclose the following in table form:
The amount of credit to be provided. If the amount is not ascertainable then the maximum amount of credit to be provided
- The annual percentage rate or rates
- Details of any interest free period
- The total amount of interest if the contract is to be paid out within 7 years
- The number, amount and frequency of repayments
- Any credit fees and charges.
- The rest of the Pre-contractual statement should disclose:
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The credit provider's name
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To whom the credit is to be paid
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Details of any changes that can be made under the contract
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The frequency of account statements
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Any default rate of interest
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Whether enforcement expenses would be paid by the debtor in the event of a breach
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Details of any mortgage or guarantee that may apply
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Details of any commission to be paid
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Details of insurance financed under the contract.
Please note: - if a number of documents are provided, each document must state that it does not contain all of the required information.
Information Statement
Purple Finance must provide the Information Statement as set out in Form 2 of the Regulations to the Code, which explains the debtor's rights and obligations under the Consumer Credit Code. The Regulations are available from your local Government printer.
The Contract
The credit contract should be clearly understandable and be in not less than 10 point type. It should include:
- the credit provider's name
- to whom the credit is to be paid
- the amount of credit to be provided. If the amount is not ascertainable then the maximum amount of credit to be provided
- the annual percentage rate or rates
- details of any interest free period
- the total amount of interest if the contract is to be paid out within 7 years
- the number, amount and frequency of repayments
- any credit fees and charges
- details of any changes that can be made under the contract
- the frequency of account statements
- any default rate of interest and how it is calculated (eg. from a published reference rate)
- whether enforcement expenses would be paid by the debtor in the event of a breach
- details of any mortgage or guarantee that may apply
- details of any commission to be paid
- details of insurance financed under the contract.
After the contract is made
Once the contract is completed we need to:
- provide a copy of the signed contract to the debtor within 14 days
- send regular account statements:-
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at least every 40 days for continuing credit contracts accessed by a card
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between 40 days to 3 months for other continuing credit contracts
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no longer than every 6 months for any other credit contract.
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Note: statements are not required in some circumstances
- Our account statements must include:-
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the opening and closing balances of the statement period
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the dates on which the statement period begins and ends
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details of each amount of credit provided during the statement period
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interest charges including when they were charged
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any fees and charges
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the annual percentage rate including any changes during the statement period
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payments and transfers to and from other accounts
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the minimum payment owed and the due date.
Further Information
You are entitled to ask for details of:
- the current balance of their account
- any amounts credited or debited during a specific period
- any overdue payments and the due date
- any amount payable and the date it became due.
Our reply must:
- be in writing if requested in writing
- be given within 14 days or 30 days if it relates to information over a year old.
Note: A reply need not be provided if we have already given the information within the last 3 months.
Contract Changes
It is possible to change the contract if both parties agree to the changes. In most cases, we will need to confirm these changes in writing within 20 days of the agreement as well as provide the debtor with any information required by the regulations.
If our contract allows for changes to be made by us without consultation with the debtor we must:
- give the debtor 20 days written notice of any changes which increase the amount, frequency or calculation of repayments
- give written notification of any changes to the annual percentage rate or reference rate not later than the day the change takes effect
- give 30 days written notice of an increase to credit fees or charges.
Enforcement Proceedings
Before we can take enforcement action we must:
- give written warning to the debtor, guarantor or mortgagor of the breach and allow the debtor 30 days to remedy the problem
- before taking action against a guarantor, we must obtain judgement against the debtor from a Tribunal/Court and allow the debtor 30 days to pay.
- obtain a court order before repossessing mortgaged goods if the amount outstanding is less than 25% or up to $10,000 (whichever is less) of the total credit provided.
Advertising
If we place an advertisement, which refers to the cost of any credit available, it must contain:
- the annual percentage rate or rates
- a statement detailing any fees or charges that may apply.
Hardship provisions
If you experience any personal hardship, caused by circumstances such as illness or unemployment, you may ask us to change the terms of the contract so you can still meet your credit obligations.
Re-opening a contract
If a debtor, mortgagor or guarantor considers their contract to be unjust they may approach a Credit Tribunal/Court to have it changed so they can better meet their repayments. If we are unable or unwilling to make any changes, the debtor can apply to a court to have the contract re-opened.
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