Victorian Consolidated Legislation

Credit Act 1984 - SECT 72

Default charges

72. Default charges



(1) Where under a credit sale contract or a loan contract the debtor does not
pay an amount payable under the contract when it is due, the credit provider
shall not make a charge in respect of the failure to pay unless there is a
term in the contract to the effect that such a charge may be made and the
charge does not exceed-

   (a)  the amount determined by applying to the daily balance of the amount
        due and unpaid-

   (i)  where a credit charge is payable under a contract-the daily percentage
        rate under the contract; or

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

   (b)  the amount determined by applying to the amount unpaid the rate
        specified in the contract for the purposes of such a charge-

whichever is the lesser.

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

   (a)  in respect of the failure to pay an amount payable under a credit sale
        contract or a loan contract when it is due unless the whole or part of
        the credit charge under the contract is a pre-determined credit
        charge;

   (b)  in respect of the failure to pay an amount payable under a regulated
        continuing credit contract; or

   (c)  in respect of a charge under subsection (1) that is unpaid.

(3) Nothing in this section affects the right of a credit provider to make or
require payment of an accrued credit charge, a deferral charge or an
enforcement expense.

Penalty: 10 penalty units.