Australian Capital Territory Consolidated Acts

CREDIT ACT 1985 - SECT 55

    (1)     For this Act, a reference to the annual percentage rate in relation to a continuing credit contract is a reference to the percentage rate calculated in accordance with the following formula:

where:

"N" means the annual percentage rate to be calculated.

"A" means the percentage rate that, under the contract, is to be applied to the chargeable amount for each billing cycle of the contract to yield the credit charge.

"B" means the number of those billing cycles that would occur during a period of 1 year if the contract were to continue in force for that period.

    (2)     If, under a continuing credit contract—

        (a)     credit is or may be provided to the debtor by way of the supply of cash by the credit provider or any other person; and

        (b)     the payment of a debt or other pecuniary obligation or the performance of any other obligation under the contract is secured by a mortgage of land;

the contract may include an acceptable rate of interest and a higher annual percentage rate that does not exceed the acceptable rate by more than 2%.

    (3)     If, in accordance with subsection (2), a continuing credit contract includes 2 annual percentage rates, the statement in the notice under section 59 of the annual percentage rate shall be made in relation to each rate.

    (4)     Except as provided by subsection (2), a credit provider that includes more than 1 annual percentage rate in relation to a continuing credit contract commits an offence.

Maximum penalty:

        (a)     for an individual—$1 000; and

        (b)     for a corporation—$5 000.

    (5)     If the annual percentage rate in relation to a continuing credit contract may, at the option of the credit provider, be any rate less than, or not exceeding, an annual percentage rate specified by the credit provider, that specified rate shall, for section 49 (1) (a), be deemed to be the annual percentage rate in relation to the contract, whether or not the annual percentage rate applied under the contract is a lower rate than that specified rate.