Document ID: chunk:federal_register_of_legislation:C2024C00826:clause:1_175aa:p1
Version: federal_register_of_legislation:C2024C00826
Segment Type: clause
Provision Reference: sch 1 cl 175AA (pt 1/2)
Character Range: 985120–987603

175AA  Cap on fees and charges for consumer leases

Overall cap for every consumer lease
 (1) A lessor must not enter into, or vary, a consumer lease so that the total amount that would be payable by the lessee in connection with the lease (including any applicable taxes and any add‑on fees) is more than the permitted cap for the lease.
Note: A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.

Monthly cap for consumer lease for indefinite period
 (2) A lessor must not enter into, or vary, a consumer lease for an indefinite period so that the total amount that would be payable by the lessee in connection with the lease (including any applicable taxes and any add‑on fees) in any month is more than 1/48 of the permitted cap for the lease.
Note: A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.

What is an add‑on fee?
 (3) An add‑on fee for a consumer lease is any fee or charge (whether an interest charge or not) for which the following conditions are met:
 (a) the fee or charge is one that:
 (i) the lessee is liable to pay to the lessor; or
 (ii) the lessee is liable to pay to another person under an agreement facilitated by or on behalf of the lessor or the other person;
 (b) the fee or charge relates to a service or product that either:
 (i) facilitates or complements the lessee's use of the goods hired under the consumer lease; or
 (ii) is marketed or offered by the lessor or another person as being complementary to the lessee's use of the goods hired under the consumer lease;
 (c) either:
 (i) failure by the lessee to pay the fee or charge, or to acquire a service or product to which the fee or charge relates, affects the lessee's rights or obligations under the consumer lease; or
 (ii) the lessor or another person has represented to the lessee that failure by the lessee to pay the fee or charge, or to acquire a service or product to which the fee or charge relates, will or may affect the lessee's rights or obligations under the consumer lease.

Amounts that do not count against caps
 (4) For the purposes of subsections (1) and (2), the following amounts are not included in the total amount payable by the lessee in connection with the consumer lease:
 (a) a fee or charge that is payable in the event of a default in payment under the consumer lease;
 (b) enforcement expenses of an amount not exceeding the amount which could be recovered by the lessor