Plain language law

New Zealand law explained for everyone

Credit Contracts and Consumer Finance Act 2003

Consumer credit contracts - Application

14: Effect of declaration

You could also call this:

"What happens when you say a loan is for business, not personal use"

Illustration for Credit Contracts and Consumer Finance Act 2003

You enter a credit contract when you borrow money. If you say the money is for business or investment, it is not a consumer credit contract. You must make this statement before you enter the contract. You make this statement by signing a separate document. You must confirm you have read and understood it. This statement is only valid if you do this. If the lender knows you are using the money for personal things, your statement does not count. This is even if you say it is for business or investment. The lender must not have known this when you made the statement.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM212752.

This page was last updated on — View changes

Topics:
Money and consumer rights > Consumer protectionMoney and consumer rights > Banking and loans
Previous

13: Presumption relating to consumer credit contract, or

"Assuming a credit contract is for personal use until proven otherwise"

Next

15: Certain contracts not consumer credit contracts, or

"What kinds of contracts are not considered consumer credit contracts?"

Part 2Consumer credit contracts
Application

14Effect of declaration

  1. A credit contract is not a consumer credit contract if the debtor makes a declaration before entering into the contract that the credit is to be used wholly or predominantly for business or investment purposes (or for both purposes).

  2. Subsection (1) does not apply if the creditor, or the person who obtains the declaration, knew, or had reason to believe, at the time the declaration was made, that the credit was in fact to be used wholly or predominantly for personal, domestic, or household purposes.

  3. A declaration is effective only if the declaration is in a separate written document and the debtor confirms that he or she has read and understood the declaration.

Notes
  • Section 14(1): amended, on , by section 11 of the Credit Contracts and Consumer Finance Amendment Act 2014 (2014 No 33).
  • Section 14(2): amended, on , by section 11 of the Credit Contracts and Consumer Finance Amendment Act 2014 (2014 No 33).