(b) this Code would, apart from this section, apply to the provision of credit under the buy now pay later contract (and to the buy now pay later contract and related matters) if the following were disregarded:
(i) paragraph 5(1)(c) (which requires charges to be made for the provision of credit);
(ii) subsection 6(1) (which excludes the provision of certain kinds of short term credit);
(iii) subsection 6(5) (which excludes the provision of credit for which only account charges are payable).
(3) If this Code applies to the provision of credit under a buy now pay later contract (and to the buy now pay later contract and related matters) under subsection (2), then:
(a) this Code applies in relation to all transactions or acts under the contract whether or not they take place in this jurisdiction; and
(b) this Code continues to apply even if the credit provider ceases to carry on a business in this jurisdiction.
13C Application of this Code to low cost credit contracts
Application of this Code apart from this section
(1) This Code applies to the provision of credit under a low cost credit contract (and to the low cost credit contract and related matters) if, apart from this section, the Code applies to the provision of credit under the low cost credit contract (and to the low cost credit contract and related matters).
Note: For when this Code applies in relation to a low cost credit contract apart from this section, see sections 5, 6 and 13B. Section 13B deals with buy now pay later contracts, including buy now pay later contracts that are low cost credit contracts.
Extending the application of this Code
(2) In addition, this Code applies to the provision of credit under a low cost credit contract (and to the low cost credit contract and related matters) if:
(a) the credit provider, or the debtor, under the low cost credit contract is a constitutional corporation; and
(b) this Code would, apart from this section, apply to the provision of credit under the low cost credit contract (and to the low cost credit contract and related matters) if the following were disregarded:
(i) paragraph 5(1)(c) (which requires charges to be made for the provision of credit);
(ii) subsection 6(1) (which excludes the provision of certain kinds of short term credit);
(iii) subsection 6(5) (which excludes the provision of credit for which only account charges are payable);
(iv) subsection 6(13) (which allows the regulations to exclude a provision of credit) and any exclusions made under that subsection;
(v) subsections 6(14) and (17) (which allow ASIC to exclude a provision of credit) and any exclusions made under those subsections.
(3) If this Code applies to the provision of credit under a low cost credit contract (and to the low cost credit contract and related matters) under subsection (2), then:
(a) this Code applies in relation to all transactions or acts under the contract whether or not they take place in this jurisdiction; and
(b) this Code continues to apply even if the credit provider ceases to carry on a business in this jurisdiction.
13D Meaning of buy now pay later arrangement and buy now pay later contract
Buy now pay later arrangement
(1) A buy now pay later arrangement is an arrangement or a series of arrangements:
(a) under which a person (the merchant) supplies goods or services to a consumer (within the meaning of the National Credit Act); and
(b) under which a third person (the BNPL provider) directly or indirectly pays the merchant an amount that is some or all of the price for the supply mentioned in paragraph (a); and
(c) that includes a contract between the BNPL provider and the consumer under which the BNPL provider provides credit to the consumer in connection with the supply mentioned in paragraph (a).
(2) However, an arrangement or a series of arrangements of the kind described in subsection (1) is not a buy now pay later arrangement if the arrangement or series of arrangements is of a kind prescribed by the regulations for the purposes of this subsection.
(3) For the purposes of subsection (1), and to avoid doubt:
(a) it does not matter whether any fees or charges are payable by the consumer or the merchant in connection with the arrangement or series of arrangements; and
(b) it does not matter whether the payment by the BNPL provider mentioned in paragraph (1)(b) occurs before, at or after the time when the goods or services are supplied by the merchant to the consumer as mentioned in paragraph (1)(a); and
(c) it does not matter whether the contract mentioned in paragraph (1)(c) is a continuing credit contract; and
(d) it is not necessary for the arrangement or series of arrangements to include any contract to which the merchant, the consumer and the BNPL provider are all parties.
Buy now pay later contract
(4) A contract is a buy now pay later contract if:
(a) it is part of a buy now pay later arrangement; and
(b) it is a contract of the kind mentioned in paragraph (1)(c).
13E Meaning of low cost credit contract
(1) A contract is a low cost credit contract if:
(a) credit is, or may be, provided under the contract; and
(b) the contract is:
(i) a buy now pay later contract; or
(ii) a contract prescribed by the regulations for the purposes of this subparagraph; and
(c) the period during which credit is, or may be, provided under the contract is no longer than the period (if any) prescribed by the regulations for the purposes of this paragraph; and
(d) the contract satisfies any requirements prescribed by the regulations for the purposes of this paragraph that relate to fees or charges that are, or may be, payable under the contract; and
(e) the contract satisfies any other requirements prescribed by the regulations for the purposes of this paragraph.
Fees and charges
(2) To avoid doubt, regulations made for the purposes of paragraph (1)(d) may prescribe that a specified fee or charge, or a fee or charge of a specified kind, must, or must not, be payable under the contract.
(3) For the purposes of this section, fees or charges:
(a) include a charge referred to in paragraph (a) of the definition of credit fees and charges in subsection 204(1); and
(b) do not include a fee, charge, duty or expense referred to in paragraph (b), (c) or (d) of that definition.
Part 2—Credit contracts
Division 1—Negotiating and making credit contracts
14 Credit contract to be in form of written contract document
(1) A credit contract must be in the form of:
(a) a written contract document signed by the debtor and the credit provider; or
(b) a written contract document signed by the credit provider and constituting an offer to the debtor that is accepted by the debtor in accordance with the terms of the offer.
(2) An offer may be accepted by the debtor for the purposes of paragraph (1)(b):
(a) by the debtor or a person authorised by the debtor accessing or drawing down credit to incur a liability; or
(b) by any other act of the debtor or of any such authorised person that satisfies the conditions of the offer and constitutes an acceptance of the offer at law.
(3) The credit provider, or a person associated with the credit provider, may not be authorised by the debtor for the purposes of subsection (2). However, this subsection does not prevent the debtor authorising the credit provider to debit the debtor’s account.
(4) In the case of a contract document consisting of more than one document, it is sufficient compliance with this section if one of the documents is duly signed and the other documents are referred to in the signed document.
15 Other forms of contract
(1) The regulations may authorise other ways of making a credit contract that do not involve a written document.
(2) In that case, the provisions of this Division apply with such modifications as are prescribed by the regulations.
16 Precontractual disclosure
(1) A credit provider must not enter into a credit contract (other than a low cost credit contract) unless the credit provider has given the debtor:
(a) a precontractual statement setting out the matters required by section 17 to be included in the contract document; and
(b) an information statement in the form required by the regulations of the debtor’s statutory rights and statutory obligations.
(1A) A credit provider must not enter into a low cost credit contract unless the credit provider has given the debtor:
(a) a precontractual statement setting out the matters required by section 17 to be included in the contract document; and
(b) an information statement that complies with:
(i) the requirements prescribed by the regulations; and
(ii) any requirements determined by ASIC under subsection (1B) of this section.
(1B) ASIC may, by legislative instrument, determine requirements for the purposes of subparagraph (1A)(b)(ii). The requirements must be consistent with any requirements prescribed by the regulations for the purposes of subparagraph (1A)(b)(i).
(2) Those statements must be given:
(a) before the contract is entered into; or
(b) before the debtor makes an offer to enter into the contract;
whichever first occurs.
(3) Before entering into a credit contract, the credit provider may inform the debtor of the comparison rate. If the credit provider does so, the comparison rate must be calculated as prescribed by the regulations and be accompanied by the warnings set out in the regulations.
(4) The precontractual statement must contain the financial information specified by the regulations in the form prescribed by the regulations.
(5) The precontractual statement may be the proposed contract document or be a separate document or documents.
(6) A document forming part of a precontractual statement consisting of more than one document when the precontractual statement is first given must indicate that it does not contain all of the required precontractual information.
(7) A precontractual statement may be varied, within the time referred to in subsection (2), by written notice containing particulars of the variation given to the debtor.
Alternative ways of giving statements to debtors
(8) The regulations may specify ways in which a credit provider may give a document to a debtor for the purposes of this section (without limiting the ways in which the credit provider may give the document to the debtor).
Mandatory requirements relating to giving statements to debtors
(9) The regulations may specify:
(a) the way in which a credit provider must give a document to a debtor for the purposes of this section; or
(b) a way in which a credit provider must not give a document to a debtor for the purposes of this section; or
(c) other requirements relating to a credit provider giving a document to a debtor for the purposes of this section.
(10) The giving of a document by a credit provider to a debtor for the purposes of this section is to be disregarded if:
(a) the giving of the document is not in the way (if any) specified for the purposes of paragraph (9)(a); or
(b) the giving of the document is in a way (if any) specified for the purposes of paragraph (9)(b); or
(c) any requirements specified for the purposes of paragraph (9)(c) in relation to the giving of the document are not satisfied.
(11) To avoid doubt, subsections (9) and (10) have effect despite section 187 (application of the Electronic Transactions Act 1999).
17 Matters that must be in contract document
(1) The contract document must contain the following matters.
Credit provider’s name
(2) The contract document must contain the credit provider’s name.
Amount of credit
(3) The contract document must contain:
(a) if the amount of credit to be provided is ascertainable:
(i) that amount; and
(ii) the persons, bodies or agents (including the credit provider) to whom it is to be paid and the amounts payable to each of them, but only if both the person, body or agent and the amount are ascertainable; and
(b) if the amount of the credit to be provided is not ascertainable—the maximum amount of credit agreed to be provided, or the credit limit under the contract, if any; and
(c) if the credit is provided by the supplier for a sale of land or goods by instalments—a description of the land and its cash price or of the goods and their cash price.
The requirement under paragraph (c) is in addition to, and does not limit, the requirement under paragraph (a) or (b).
Note: A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.
Annual percentage rate or rates
(4) In the case of a credit contract other than a small amount credit contract, the contract document must contain:
(a) the annual percentage rate or rates under the contract; and
(b) if there is more than one rate, how each rate applies; and
(c) if an annual percentage rate under the contract is determined by referring to a reference rate:
(i) the name of the rate or a description of it; and
(ii) the margin or margins (if any) above or below the reference rate to be applied to determine the annual percentage rate or rates; and
(iii) where and when the reference rate is published or, if it is not published, how the debtor may ascertain the rate; and
(iv) the current annual percentage rate or rates.
Note: A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.
Calculation of interest charges
(5) In the case of a credit contract other than a small amount credit contract, the contract document must contain the method of calculation of the interest charges payable under the contract and the frequency with which interest charges are to be debited under the contract.
Note: A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.
Total amount of interest charges payable
(6) In the case of a credit contract other than a small amount credit contract, the contract document must contain the total amount of interest charges payable under the contract, if ascertainable (but only if the contract would, on the assumptions under sections 180 and 182, be paid out within 7 years of the date on which credit is first provided under the contract).
Note: A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.
Where no interest charge is payable under low cost credit contract
(6A) In the case of a credit contract that is a low cost credit contract, if no interest charges are payable under the contract then:
(a) subsections (4), (5) and (6) do not apply in relation to the contract document; and
(b) the contract document must contain a statement to the effect that no interest charges are payable under the contract.
Repayments
(7) In the case of a credit contract other than a low cost credit contract, the contract document must contain:
(a) if more than one repayment is to be made:
(i) the amount of the repayments or the method of calculating the amount; and
(ii) if ascertainable, the number of the repayments; and
(iii) if ascertainable, the total amount of the repayments, but only if the contract would, on the assumptions under sections 180 and 182, be paid out within 7 years of the date on which credit is first provided under the contract; and
(iv) when the first repayment is to be paid, if ascertainable, and the frequency of payment of repayments; and
(b) if the contract provides for a minimum repayment, the amount of that repayment, if ascertainable, but, if not, the method of calculation of the minimum repayment.
Paragraph (a) does not apply to minimum repayments under a continuing credit contract.
(7A) If the credit contract is a low cost credit contract, and more than one repayment is to be made, then the contract document must contain:
(a) the frequency of payment of repayments; and
(b) if ascertainable, the amount of the repayments, the number of repayments and the total amount of the repayments; and
(c) if the amount of the repayments is not ascertainable—the method of calculating the amount of the repayments.
Credit fees and charges
(8) The contract document must contain:
(a) a statement of the credit fees and charges that are, or may become, payable under the contract, and when each such fee or charge is payable, if ascertainable; and
(b) the amount of any such fee or charge if ascertainable, but, if not, the method of calculation of the fee or charge, if ascertainable; and
(c) the total amount of credit fees and charges payable under the contract to the extent that it is ascertainable.
Note: A penalty may be imposed for contravention of a key requirement in paragraph (a) or (b), but only in respect of retained credit fees and charges: see Part 6.
Changes affecting interest and credit fees and charges
(9) If the annual percentage rate or rates or the amount or frequency of payment of a credit fee or charge or instalment payable under the contract may be changed, or a new credit fee or charge may be imposed, the contract document must contain a statement or statements to that effect and of the means by which the debtor will be informed of the change or the new fee or charge.
Note: A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.
Statements of account
(10) The contract document must contain the frequency with which statements of account are to be provided to the debtor (except in the case of a credit contract for which the annual percentage rate is fixed for the whole term of the contract and under which there is no provision for varying the rate).
(10A) If the credit contract is a low cost credit contract, and statements of account are to be given to the debtor by electronic communication, then the contract document must contain information about how the statements of account will be given.