Directors and senior managers of lenders are being warned they will soon need to ensure their conduct meets a high standard or potentially face penalties.
Lenders are being told they could face "significant financial consequences" if they fall foul of the new Credit Contracts and Consumer Finance Act. Photo: 123rf
The Commerce Commission has finalised due diligence guidance for consumer credit providers - including mobile traders who sell on credit.
Anna Rawlings Photo: Supplied
It outlines how they will need to exercise due diligence to make sure their business complies with all of its obligations under upcoming changes to the law.
"The new due diligence duty obliges and incentivises individual corporate officers to drive a culture of compliance with the CCCF (Credit Contracts and Consumer Finance) Act from the top down," said Commission chair Anna Rawlings.
"Failure to exercise the required levels of care, diligence and skill could expose you, personally, to significant financial consequences, including pecuniary penalties of up to $200,000."
The government's changes to the CCFA are coming into effect in stages, with the due diligence duty coming into force in October.