The Commerce Commission has finalised its guidance for directors and senior managers of consumer credit providers and mobile traders on how to comply with the due diligence duty.
From 1 October 2021 directors and senior managers of lenders, including mobile traders selling on credit, will need to exercise due diligence to ensure their business complies with its duties and obligations under the Credit Contracts and Consumer Finance Act (CCCF Act).
The guidance explains which directors and senior managers are subject to the duty of due diligence and provides information to help them understand what it means for them.
"This is an important new obligation. The new due diligence duty obliges and incentivises individual corporate officers to drive a culture of compliance with the CCCF 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."
"We would like to thank all those who provided submissions in response to our draft guidelines, the feedback was both valuable and important to informing our final guidance," said Ms Rawlings.
The finalised due diligence guidance can be found on the Commission's website.
