Last updated 14 January 2019
Leases are not regulated by the National Credit Code (Credit Code) if:
- the consumer has a right to buy the goods and the contract will be regulated as a hire-purchase (credit contract) (s 9)
- goods are hired by an employee in connection with the employee’s remuneration or other employment benefits (s 171(2))
- they are for four months or less, or for an indefinite period (s 171(1)).
Otherwise, there is a rebuttable presumption that the lease is regulated (s 172 Credit Code).
There is not currently an equivalent section to s 50 of the Credit Code (prohibited securities) stopping a lease back of consumer goods owned by the consumer (blackmail securities).
The lease proposal disclosure document must disclose commissions and contain the following (s 144(2) National Consumer Credit Protection Act 2009 (Cth) (NCCP Act)):
- the total amount of any fees or charges that the consumer is liable to pay to the licensee in relation to the consumer lease and the method used for working out that amount
- a reasonable estimate of the total amount of any commissions that the licensee, or an employee, director or credit representative of the licensee, is likely to receive in relation to the consumer lease and the method used for working out that amount
- a reasonable estimate of the total amount of any fees or charges that the consumer is likely to be liable to pay to the licensee in relation to applying for the consumer lease
- a reasonable estimate of the total amount of any fees or charges that the consumer is likely to be liable to pay to another person in relation to applying for the consumer lease.
The licensee may not profit from third party charges, that means a licensee must not request or demand payment of an amount, as reimbursement for the third party amount, that exceeds the third party amount (s 145 NCCP Act).
The NCCP Act also provides for the prohibition of licensees suggesting or assisting the consumer with (s 146), or pressuring the consumer to remain in (s 147), unsuitable leases.
Various sections of the NCCP Act (ss 136-138, 143-144(1), 150-151, 169) and the Credit Code (ss 173-175) deal with the specific requirements of consumer leases and the date after which the requirements apply.