Victorian Consolidated Legislation

Credit Act 1984 - SECT 71

Deferral charge

71. Deferral charge



(1) Where a credit provider and a debtor agree to vary a credit sale contract
or a loan contract by the deferral of the payment of an amount payable by the
debtor under the contract, the credit provider shall not make a charge in
respect of the deferral unless-

   (a)  the payment is deferred-

   (i)  in accordance with a term in the contract to the effect that such a
        payment may be deferred; or

   (ii) in accordance with the agreement of the credit provider and the
        debtor;

   (b)  the charge in respect of the deferral does not exceed the amount
        determined in accordance with subsection (2);

   (c)  a default charge is not made in respect of the deferral; and

   (d)  the deferral is made in accordance with subsection (4).

(2) The amount of a charge in respect of the deferral of the payment of an
amount payable under a credit sale contract or a loan contract determined in
accordance with this subsection is-

   (a)  the amount that is the sum of the amount determined by applying to the
        amount payment of which is deferred, in respect of the number of days
        for which it is deferred-

   (i)  where a credit charge is payable under the contract-a rate not
        exceeding the daily percentage rate that applies to the contract; or

   (ii) where a credit charge is not payable under the contract-the rate
        prescribed for the purposes of this section-

and the amounts (if any) payable in respect of charges mentioned in subsection
(3) in relation to the deferral of the payment; or

   (b)  the amount agreed by the credit provider and the debtor as the charge-

whichever is the lesser.

(3) The charges in relation to the deferral of a payment referred to in
paragraph (a) of subsection (2) and paragraph (b) of subsection (4) are
charges in respect of-

   (a)  stamp duty payable in respect of or in relation to the deferral; and





   (b)  fees payable to a legal practitioner (not being the credit provider or
        an employee of the credit provider) authorized to prepare documents
        for the deferral.

(4) Where a credit provider defers payment of an amount payable under a credit
sale contract or a loan contract the deferral is in accordance with this
subsection if, not later than fourteen days after the credit provider agrees
to defer or, where the deferral is made under a term of the contract, he
defers the payment, the credit provider gives notice in writing to the debtor
stating-

   (a)  the amount of the payment deferred;

   (b)  the amounts (if any) payable in respect of charges mentioned in
        subsection (3) in relation to the deferral of the payment;

   (c)  the date on which the period for which the payment is deferred
        expires;

   (d)  the amount of the charge, in dollars and cents; and

   (e)  if applicable, the rate applied to the amount payment of which is
        deferred in accordance with paragraph (a) of subsection (2) to
        determine the amount of the charge.

(5) A credit provider shall not make a charge-

   (a)  in respect of the deferral of the payment of an amount payable by the
        debtor under a credit sale contract or a loan contract, unless the
        whole or part of the credit charge under the contract is a
        predetermined credit charge; or

   (b)  in respect of the deferral of the payment of an amount payable by the
        debtor under a regulated continuing credit contract.

(6) Notwithstanding anything to the contrary in this Act, the deferral of the
payment of an amount payable by a debtor under a credit sale contract or a
loan contract in accordance with this section is not a loan contract.

Penalty: 10 penalty units.