The Law Handbook 2024

424 Section 5: Managing your money period after that (reg 51 NCCP Regulations). Some ‘buy now, pay later’ arrangements fall within this exemption. Joint credit and debit facilities A number of banks and other financial institutions now offer products that can be used by consumers as both a savings account and credit facility. Under such a facility, a consumer with funds in their account will receive interest on those funds but can also run the balance below zero to an agreed credit limit on the terms set out in the contract. The NCC will apply only to the part of the contract that relates to the credit facility, or both the credit facility and the savings account. It will not apply to the part of the contract that relates only to the savings account (s 6(6) NCC). For example, the NCC could not be used to challenge the validity of a new fee that is payable only when there are funds in the account. However, it could be used to challenge a new fee, such as a monthly account charge, that is payable irrespective of whether the account is in credit or debit. Bills of exchange and promissory notes The NCC applies to bills of exchange and promissory notes except where they are provided by an authorised deposit-taking institution (such as a bank or credit union), or are otherwise exempted under the NCCP Regulations (s 6(7) NCC). Insurance premiums payable by instalments Many insurers now allow annual insurance premiums to be paid by monthly instalments. Often the combined amount of the monthly premiums exceeds the annual premium by an amount equivalent to a finance company interest rate (e.g. 20 per cent). However, these agreements are not regulated by the NCC (s 6(8) NCC). Pawnbrokers The NCC does not apply to credit provided by a pawnbroker, in the ordinary course of a pawnbroker’s business, as long as: • the pawnbroker is lawfully conducting business; and • if the debtor is in default, the pawnbroker’s only recourse is against the goods provided as security (s 6(9) NCC). However, pawnbroking transactions may be con­ sidered to be unjust and re-opened under sections 76 to 81 of the NCC . See also ‘Pawnbrokers’ in Chapter 5.8: Mortgages, consumer leases and other finance products. Trustees of estates The NCC will not apply where credit is provided by a trustee of the estate of a deceased person to a beneficiary or prospective beneficiary of the deceased’s estate. However, such arrangements are also subject to the unjust transactions provisions of sections 76 to 81 of the NCC (s 6(10) NCC). Employee loans A partial exemption from the NCC applies where credit is provided by an employer (or a corporation related to an employer) to an employee or former employee if: • credit is provided on the condition that the debtor is either an employee or a former employee of either the employer or the related corporation; or • where the employer or related corporation provides the credit in the course of a business of providing credit, the credit is provided to the debtor on terms more favourable than the credit provider would grant to non-employees. Nevertheless, Part 1, Part 4, Division 3 of Part 5, Division 4 and 5 of Part 7 and Parts 12, 13 and 14 of the NCC do apply to employee loans (s 6(11) NCC). Margin loans The NCC does not apply to margin loans within the meaning of section 761EA(1) of the Corporations Act 2001 (Cth) (s 6(12) NCC). Margin loans are regulated as a financial product under chapter 7 of the Corporations Act 2001 (Cth). Credit specifically excluded by NCCP Regulations A number of exemptions apply to various govern­ ment schemes, the provision of credit by particular credit providers, and other limited circumstances pursuant to the NCCP Regulations (regs 51–65C). Most notable among these is the exemption in certain circumstances of credit under $50 (reg 52 NCCP Regulations) and the provision of charge cards by a number of specified corporations.