National Consumer Credit Protection Act 2009

An Act relating to credit, and for related purposes

This Act may be cited as the National Consumer Credit Protection Act 2009.

(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

Commencement information
Column 1	Column 2	Column 3
Provision(s)	Commencement	Date/Details
1. Sections 1 and 2 and anything in this Act not elsewhere covered by this table	The day on which this Act receives the Royal Assent.	15 December 2009
2. Sections 3 to 337 and Schedule 1	A single day to be fixed by Proclamation. However, if any of the provision(s) do not commence within the period of 6 months beginning on the day on which this Act receives the Royal Assent, they commence on the first day after the end of that period.	1 April 2010 (see F2010L00301)

Note: This table relates only to the provisions of this Act as originally passed by both Houses of the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent.

(2) Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act.

3 The National Credit Code

Schedule 1 (which is the National Credit Code) has effect as a law of the Commonwealth.

Part 1‑2—Definitions

Division 1—Introduction

4 Guide to this Part

This Part is about the terms that are defined in this Act (other than the National Credit Code). (For the terms that are defined in the National Credit Code, see section 204 of that Code.)

Division 2 has the Dictionary (see section 5). The Dictionary is a list of every term that is defined in this Act (other than the National Credit Code). A term will either be defined in the Dictionary itself, or in another provision of this Act. If another provision defines the term, the Dictionary will have a signpost to that definition.

Division 3 has definitions relating to the meaning of credit activity.

Division 4 has some other definitions that apply across this Act (other than the National Credit Code).

Division 2—The Dictionary

5 The Dictionary

(1) In this Act (other than the National Credit Code):

acts as an intermediary: see section 9.

ADI has the same meaning as in subsection 5(1) of the Banking Act 1959.

adverse publicity order: see section 182.

AFCA scheme has the same meaning as in the Corporations Act 2001.

affairs, in relation to a person that is a body corporate, has the same meaning as in Part 3 of the ASIC Act.

affidavit includes affirmation.

ancillary offence, in relation to another offence, means:

(a) an offence against section 6 of the Crimes Act 1914; or

(b) an ancillary offence within the meaning of the Criminal Code;

that relates to the other offence.

annual percentage rate has the same meaning as in section 27 of the National Credit Code.

annual turnover, of a body corporate during a 12‑month period, means the sum of the values of all the supplies that the body corporate, and any body corporate related to the body corporate, have made, or are likely to make, during the 12‑month period, other than:

(a) supplies made from any of those bodies corporate to any other of those bodies corporate; or

(b) supplies that are input taxed; or

(c) supplies that are not for consideration (and are not taxable supplies under section 72‑5 of the A New Tax System (Goods and Services Tax) Act 1999); or

(d) supplies that are not made in connection with an enterprise that the body corporate carries on; or

(e) supplies that are not connected with Australia.

Expressions used in this definition that are also used in the A New Tax System (Goods and Services Tax) Act 1999 have the same meaning as in that Act.

appeal includes:

(a) an application for a new trial; and

(b) proceedings to review or call in question the proceedings, decision or jurisdiction of a court or judge.

approved code of conduct means a code of conduct approved by ASIC by legislative instrument under section 238A, and includes a replacement code of conduct approved under that section.

APRA means the Australian Prudential Regulation Authority.

ASIC means the Australian Securities and Investments Commission.

ASIC Act means the Australian Securities and Investments Commission Act 2001, and includes instruments made under that Act.

ASIC member means a member of ASIC within the meaning of the ASIC Act.

ASIC staff member means a staff member within the meaning of subsection 5(1) of the ASIC Act.

associate: see section 15A.

Australian business law means a law of the Commonwealth, or of a State or Territory, that is a law that regulates, or relates to the regulation of, business or persons engaged in business.

Australian credit licence: see subsection 35(1).

Australian credit licence number means the number given to a licence under section 43.

Australian financial services licence has the same meaning as in the Corporations Act 2001.

authorised, in relation to a credit activity: see subsection 35(2).

avoidance purpose: see subsection 323A(2).

banker has the same meaning as in section 9 of the Corporations Act 2001.

banking group means a relevant group of bodies corporate (within the meaning of the Banking Act 1959) that includes a body corporate covered by paragraph 133CN(1)(a) (about large ADIs).

banned from engaging in a credit activity under a law of a State or Territory: a person is banned from engaging in a credit activity under a law of a State or Territory if:

(a) the person holds a State or Territory credit licence that is suspended (otherwise than by request of the person); or

(b) the person has held a State or Territory credit licence that has been cancelled within the last 7 years (otherwise than by the person’s request); or

(c) an order of a court made under a law of a State or Territory prohibits the person from engaging in a credit activity; or

(d) the person is otherwise prohibited under a law of a State or Territory from engaging in a credit activity.

banning order means an order made under subsection 80(1).

beneficiary of a guarantee means a person who is a party to a guarantee and who has the benefit of the guarantee, and includes a person who is a beneficiary of a guarantee because of section 10.

benefit derived and detriment avoided:

(a) because of an offence—has the meaning given by section 288E; and

(b) because of a contravention of a civil penalty provision—has the meaning given by section 167D.

body regulated by APRA has the same meaning as in subsection 3(2) of the Australian Prudential Regulation Authority Act 1998.

book includes:

(a) a register; and

(b) any other record of information; and

(d) a document.

business day has the same meaning as in section 204 of the National Credit Code.

carried on in this jurisdiction has a meaning affected by section 12.

civil penalty provision: a subsection of this Act (or a section of this Act that is not divided into subsections) is a civil penalty provision if:

(a) the words “civil penalty” and one or more amounts in penalty units are set out at the foot of the subsection (or section); or

(b) another provision of this Act specifies that the subsection (or section) is a civil penalty provision.

coastal sea:

(a) in relation to Australia—means:

(i) the territorial sea of Australia; and

(ii) the sea on the landward side of the territorial sea of Australia and not within the limits of a State or internal Territory;

and includes the airspace over, and the sea‑bed and subsoil beneath, any such sea; and

(b) in relation to a State or Territory—means so much of the coastal sea of Australia as is within the area described in Schedule 1 to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 under the heading that refers to that State or Territory.

code of conduct means a code of conduct that relates to any aspect of the activities of:

(a) licensees; or

(b) credit representatives;

being activities in relation to which ASIC has a regulatory responsibility.

commission includes any financial or other benefit in the nature of a commission.

Note: Commissions may be conflicted remuneration: see Division 4 of Part 3‑5A.

Commonwealth body means:

(a) an Agency (within the meaning of the Public Service Act 1999); or

(b) a body, whether incorporated or not, established for a public purpose by or under a law of the Commonwealth; or

(i) holding or performing the duties of an office established by or under a law of the Commonwealth; or

(ii) holding an appointment made under a law of the Commonwealth.

Commonwealth credit legislation means this Act and the Transitional Act.

conflicted remuneration: see sections 158N and 158NA.

constitutional corporation means a corporation to which paragraph 51(xx) of the Constitution applies.

constitutional trade and commerce means trade and commerce:

(a) between Australia and places outside Australia; or

(b) between the States; or

(d) between 2 Territories; or

(e) within a Territory.

constrained document: see subsection 160CA(1).

constrained information: see subsection 160CA(1).

consumer means a natural person or a strata corporation.

consumer lease means a consumer lease to which Part 11 of the National Credit Code applies.

consumer lease for household goods has the same meaning as in section 204 of the National Credit Code.

continuing credit contract has the same meaning as in section 204 of the National Credit Code.

contravention:

(a) in relation to an offence against a law—includes an ancillary offence relating to the offence against the law; and

(b) in relation to a civil penalty provision—has a meaning affected by section 169.

control has the meaning given by section 16A.

core obligation has the meaning given by subsection 50A(3).

credit has the same meaning as in subsection 3(1) of the National Credit Code.

credit activity: see section 6.

credit assistance: see section 8.

credit book: see subsection 227(4).

credit card: see subsection 133BA(2).

credit card contract: see subsection 133BA(1).

credit card termination entitlement: see subsection 133BT(3).

credit contract has the same meaning as in section 4 of the National Credit Code.

credit information has the same meaning as in the Privacy Act 1988.

credit legislation means:

(a) this Act; and

(b) the Transitional Act; and

(d) any other Commonwealth, State or Territory legislation that covers conduct relating to credit activities (whether or not it also covers other conduct), but only in so far as it covers conduct relating to credit activities.

credit limit of a credit contract means the maximum amount of credit that may be provided under the contract.

credit limit increase invitation, in relation to a credit card contract: see subsection 133BE(5).

credit limit reduction entitlement: see subsection 133BF(3).

credit provider:

(a) when used in Part 3‑2CA—has the same meaning as in the Privacy Act 1988; and

(b) otherwise—has the same meaning as in section 204 of the National Credit Code, and includes a person who is a credit provider because of section 10 of this Act.

credit registers: see section 213.

credit reporting body has the same meaning as in the Privacy Act 1988.

credit representative: see subsections 64(2) and 65(2).

credit representative number means the number given to a credit representative under section 72.

credit service: see section 7.

criminal procedure: see section 205.

data standards means standards made by the Registrar under section 212H.

debtor has the same meaning as in section 204 of the National Credit Code.

declaration of contravention means a declaration made under section 166.

designated secrecy provision has the meaning given by subsection 212N(3).

director has the same meaning as in the Corporations Act 2001.

disclosure framework means the disclosure framework made by the Registrar under section 212L.

disqualification order means an order of the court under section 86.

document registers: see section 219.

eligible credit account: see section 133CO.

eligible credit reporting body: see subsection 133CN(2).

eligible licensee: see subsection 133CN(1).

enforceable code provision means a provision of an approved code of conduct identified by ASIC under subsection 238A(2).

engage in conduct means:

(a) do an act; or

(b) omit to perform an act.

evidential burden, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.

examination, when used in Chapter 6 (which deals with compliance and enforcement), means an examination of a person pursuant to a requirement made under section 253.

expenses, in relation to an investigation under Part 6‑1, includes costs and expenses incurred by ASIC in relation to proceedings brought under section 275 as a result of the investigation.

Federal Court means the Federal Court of Australia.

financial hardship information has the same meaning as in the Privacy Act 1988.

financial records: see subsection 88(2).

financial services licensee has the same meaning as in the Corporations Act 2001.

financial year: see subsection 100(6).

function includes a duty.

give:

(a) when used in Chapter 6 (which deals with compliance and enforcement) in relation to a document—has a meaning affected by section 314; and

(b) when used in relation to information, includes:

(i) explaining or stating a matter; and

(ii) identifying a person, matter or thing; and

(iii) disclosing information; and

(iv) answering a question.

government entity has the meaning given by section 41 of the A New Tax System (Australian Business Number) Act 1999.

guarantee means a guarantee to which the National Credit Code applies.

hardship notice has the same meaning as in section 204 of the National Credit Code.

head company, of a banking group, means the member of the group covered by paragraph 133CN(1)(a) (about large ADIs).

hearing, when used in Chapter 6 (which deals with compliance and enforcement), means a hearing before ASIC and, in sections 278, 280, 281 and 282 (which are in that Chapter), includes part of such a hearing.

household goods has the same meaning as in section 204 of the National Credit Code.

indirect remuneration means a commission or conflicted remuneration.

individual fine formula means the formula set out in subsection 288C(3).

infringement notice means a notice given under section 288J.

initial National Credit Code: see subsection 20(2).

insolvent means:

(a) in the case of a natural person—a person who is an insolvent under administration; or

(b) in the case of a body corporate—a body corporate that is a Chapter 5 body corporate (within the meaning of the Corporations Act 2001); or

(c) in the case of a partnership—a partnership against which a creditor’s petition or a debtor’s petition is presented under Division 2 or 3 of Part IV of the Bankruptcy Act 1966.

investigate, in relation to ASIC, means investigate in the course of performing any of ASIC’s functions or exercising any of ASIC’s powers.

involved in: a person is involved in a contravention of a provision of legislation if, and only if, the person:

(a) has aided, abetted, counselled or procured the contravention; or

(b) has induced the contravention, whether by threats or promises or otherwise; or

(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

(d) has conspired with others to effect the contravention.

judgment means a judgment, decree or order, whether final or interlocutory.

Key Facts Sheet:

(a) for a credit card contract—see section 133BB; and

(b) for a standard home loan—see section 133AB.

knowledge, in Division 5 of Part 2‑2: see section 53C.

large ADI means an ADI of a kind determined under subsection (1A).

law of a referring State or a Territory means a law of, or in force in, a referring State or a Territory but does not include a law of the Commonwealth in force in the referring State or the Territory.

law of a State or Territory means a law of, or in force in, a State or Territory but does not include a law of the Commonwealth in force in the State or Territory.

lawyer means a person who is admitted to the legal profession by a federal court or a Supreme Court of a State or Territory.

lessee means the lessee under a consumer lease.

lessor has the same meaning as in section 204 of the National Credit Code, and includes a person who is a lessor because of section 10.

licence means an Australian credit licence.

licensee means a person who holds a licence.

licensing anniversary: see subsection 53(7).

linked: for when a credit card is linked to a credit card contract, see subsection 133BA(3).

lodge with ASIC: see section 216.

lower court means:

(a) the Federal Circuit and Family Court of Australia (Division 2); or

(b) a court of a State or Territory that is not a superior court.

malice: see subsection 16(2).

mandatory code of conduct means a code of conduct that is declared by regulations under section 238F to be mandatory.

mandatory credit information: see section 133CP.

matter includes an act, an omission, a body, a person or a thing.

misleading: see section 13.

mortgage means a mortgage to which the National Credit Code applies.

mortgage broker: see section 15B.

mortgagee means the mortgagee under a mortgage, and includes a person who is a mortgagee because of section 10.

mortgage intermediary: see section 15C.

mortgagor means the mortgagor under a mortgage.

National Credit Code means Schedule 1 to this Act, and includes:

(a) regulations made under section 329 for the purposes of that Schedule; and

(b) instruments made under that Schedule.

officer of the Commonwealth has the same meaning as in paragraph 75(v) of the Constitution.

official employment means:

(a) appointment or employment by the Commonwealth, or the performance of services for the Commonwealth; or

(b) the exercise of powers or performance of functions under a delegation by the Registrar.

Part 3‑2CA body: see section 133CZF.

payment period, in relation to an infringement notice, has the meaning given by section 288M.

pecuniary penalty order means an order made under section 167.

penalty unit has the same meaning as in section 4AA of the Crimes Act 1914.

person has a meaning affected by section 14 (which deals with partnerships) and section 15 (which deals with multiple trustees).

personal information has the same meaning as in the Privacy Act 1988.

power includes an authority.

premises includes:

(a) a structure, building, aircraft, vehicle or vessel; and

(b) any land or place (whether enclosed or built in or not); and

prescribed State or Territory order means an order under a law of a State or Territory, being an order of a kind prescribed by the regulations.

proceedings:

(a) when used in Chapter 6 (which deals with compliance and enforcement)—has the same meaning as the definition of proceeding in subsection 5(1) of the ASIC Act; and

(b) otherwise—means proceedings, whether criminal or civil, before a court.

proscribed referral: see subsection 160G(2).

protected information means information:

(a) obtained by a person in the course of the person’s official employment; and

(b) disclosed to the person or another person, or obtained by the person or another person:

(i) under, or in relation to, this Act; or

(ii) under another law of the Commonwealth;

in connection with particular functions or powers of the Registrar.

qualified privilege has a meaning affected by section 16.

receiving court: see section 191.

recklessness, in Division 5 of Part 2‑2: see section 53C.

record, when used in Chapter 6 (which deals with compliance and enforcement) in relation to an examination, means the whole or part of a record made under section 258 of statements made at the examination.

Reference Checking and Information Sharing Protocol means the protocol determined by ASIC under subsection 47(3A).

referred credit matter: see subsection 20(1).

referring State: see section 19.

registered company auditor has the same meaning as in section 9 of the Corporations Act 2001.

Registrar has the meaning given by section 16B.

related body corporate has the same meaning as in section 9 of the Corporations Act 2001.

related criminal justice process decision: see section 188.

relevant criminal law: see subsection 204(5).

relevant superior court, in relation to a lower court, means:

(a) if the lower court is the Federal Circuit and Family Court of Australia (Division 2)—the Federal Court; or

(b) if the lower court is a court of a State or Territory—the Supreme Court of the State or Territory.

relinquishment order means an order made under subsection 167C(1).

repayment date: see subsection 133CD(3).

reportable situation has the meaning given by section 50A.

representative of a person means:

(a) if the person is a licensee:

(i) an employee or director of the licensee; or

(ii) an employee or director of a related body corporate of the licensee; or

(iii) a credit representative of the licensee; or

(iv) any other person acting on behalf of the licensee; or

(b) otherwise:

(i) an employee or director of the person; or

(ii) an employee or director of a related body corporate of the person; or

(iii) any other person acting on behalf of the person.

residential property has the same meaning as in section 204 of the National Credit Code.

reverse mortgage has the same meaning as in section 13A of the National Credit Code.

reverse mortgage information statement means a document relating to reverse mortgages that complies with the regulations.

scheme means:

(a) any agreement, arrangement, understanding, promise or undertaking, whether express or implied; or

(b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise; or

secrecy provision has the meaning given by subsection 212N(2).

senior manager has the same meaning as in section 9 of the Corporations Act 2001.

sensitive information has the same meaning as in the Privacy Act 1988.

serious fraud means an offence involving fraud or dishonesty, being an offence:

(a) against a law of the Commonwealth, or of a State or Territory, or any other law; and

(b) punishable by imprisonment for life or for a period, or maximum period, of at least 3 months.

short‑term credit contract: a credit contract is a short‑term credit contract if:

(a) the contract is not a continuing credit contract; and

(b) the credit provider under the contract is not an ADI; and

(d) the term of the contract is 15 days or less; and

(e) the contract meets any other requirements prescribed by the regulations.

small amount credit contract: a credit contract is a small amount credit contract if:

(a) the contract is not a continuing credit contract; and

(b) the credit provider under the contract is not an ADI; and

(d) the term of the contract is at least 16 days but not longer than 1 year (or such other number of years as is prescribed by the regulations); and

(e) the debtor’s obligations under the contract are not, and will not be, secured; and

(f) the contract meets any other requirements prescribed by the regulations.

standard home loan: see subsection 133AA(1).

State, when used in a geographical sense, includes the coastal sea of the State.

statement, when used in Chapter 6 (which deals with compliance and enforcement) in relation to an examination, includes a question asked, an answer given, and any other comment or remark made, at the examination.

state of mind: the state of mind of a person includes:

(a) the knowledge, intention, opinion, belief or purpose of the person; and

(b) the person’s reasons for the intention, opinion, belief or purpose.

State or Territory credit licence means a licence or registration that:

(a) is granted under a law of a State or Territory; and

(b) authorises the licensee or registered person to engage in a credit activity.

strata corporation has the same meaning as in section 204 of the National Credit Code.

subject to an infringement notice, in relation to an offence provision or civil penalty provision, has the meaning given by section 288K.

subscriber, in relation to an approved code of conduct:

(a) means a person or entity that agrees, in a way required by the applicant for the code’s approval, to be bound by the code; and

(b) if a person or entity no longer agrees to be bound by the code—includes the person or entity during the period that the person or entity did agree to be so bound.

superior court means any of the following courts:

(a) the Federal Court;

(b) the Supreme Court of a State or Territory.

supply requirements: see section 133CQ.

taxation law has the same meaning as in the Income Tax Assessment Act 1997.

Territory:

(a) means the following:

(i) the Australian Capital Territory;

(ii) the Jervis Bay Territory;

(iii) the Northern Territory;

(iv) Norfolk Island;

(v) the Territory of Christmas Island;

(vi) the Territory of Cocos (Keeling) Islands; and

(b) when used in a geographical sense—includes the Territory’s coastal sea (if any).

this Act includes instruments made under this Act.

this jurisdiction: see subsections 21(2) and (3).

transfer matter: see section 191.

transferring court: see section 191.

Transitional Act means the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009, and includes instruments made under that Act.

tribunal means:

(a) a tribunal in Australia; or

(b) any other body, authority or person in Australia having power, by law or by consent of parties, to hear, receive or examine evidence.

unsolicited communication to a consumer: see subsection 133CF(2).

use of a credit card: see subsection 133BA(4).

value of a credit contract, mortgage, guarantee or consumer lease: see section 199.

virtual enquiry technology means any technology that allows a person to appear at all or part of a hearing, examination or other enquiry without being physically present at the hearing, examination or other enquiry.

within the authority: a representative’s conduct is within the authority of a person if:

(a) for a representative who is an employee of the person or of a related body corporate of the person—the conduct is within the scope of the employee’s employment; or

(b) for a representative who is a director of the person or of a related body corporate of the person—the conduct is within the scope of the director’s duties as director; or

(c) for a representative who is a credit representative of the person—the conduct is within the scope of the authorisation of the credit representative under subsection 64(1) or 65(1); or

(d) otherwise—the conduct is within the scope of the authority given by the person.

witness, in relation to a hearing before ASIC, means a person appearing at the hearing to give evidence.

written record, when used in Chapter 6 (which deals with compliance and enforcement) in relation to an examination, means:

(a) a record of the examination:

(i) that is made in writing; or

(ii) as reduced to writing; or

(b) a part of such a record.

(1A) The Minister may, by legislative instrument, determine the kinds of ADIs that are large ADIs.

(2) In this Act (other than the National Credit Code), a reference to a provision is a reference to a provision of this Act, unless the contrary intention appears.

Division 3—Definitions relating to the meaning of credit activity

6 Meaning of credit activity

(1) The following table sets out when a person engages in a credit activity.

Meaning of credit activity
Item	Topic	A person engages in a credit activity if:
1	credit contracts	(a) the person is a credit provider under a credit contract; or (b) the person carries on a business of providing credit, being credit the provision of which the National Credit Code applies to; or (c) the person performs the obligations, or exercises the rights, of a credit provider in relation to a credit contract or proposed credit contract (whether the person does so as the credit provider or on behalf of the credit provider); or
2	credit service	the person provides a credit service; or
3	consumer leases	(a) the person is a lessor under a consumer lease; or (b) the person carries on a business of providing consumer leases; or (c) the person performs the obligations, or exercises the rights, of a lessor in relation to a consumer lease or proposed consumer lease (whether the person does so as the lessor or on behalf of the lessor); or
4	mortgages	(a) the person is a mortgagee under a mortgage; or (b) the person performs the obligations, or exercises the rights, of a mortgagee in relation to a mortgage or proposed mortgage (whether the person does so as the mortgagee or on behalf of the mortgagee); or
5	guarantees	(a) the person is the beneficiary of a guarantee; or (b) the person performs the obligations, or exercises the rights, of another person who is a beneficiary of a guarantee or proposed guarantee, in relation to the guarantee or proposed guarantee (whether the person does so on the person’s own behalf or on behalf of the other person); or
6	prescribed activities	the person engages in an activity prescribed by the regulations in relation to credit, being credit the provision of which the National Credit Code applies to, or would apply to if the credit were provided.

(2) A subclass of any of the conduct referred to in the table in subsection (1) is also a credit activity.

Note: For example, ASIC could impose a condition on a licence under subsection 45(6) that provides that a person is authorised to be a credit provider only under particular types of credit contracts (such as credit card contracts).

7 Meaning of credit service

A person provides a credit service if the person:

(a) provides credit assistance to a consumer; or

(b) acts as an intermediary.

8 Meaning of credit assistance

A person provides credit assistance to a consumer if, by dealing directly with the consumer or the consumer’s agent in the course of, as part of, or incidentally to, a business carried on in this jurisdiction by the person or another person, the person:

(a) suggests that the consumer apply for a particular credit contract with a particular credit provider; or

(b) suggests that the consumer apply for an increase to the credit limit of a particular credit contract with a particular credit provider; or

(d) assists the consumer to apply for a particular credit contract with a particular credit provider; or

(e) assists the consumer to apply for an increase to the credit limit of a particular credit contract with a particular credit provider; or

(f) suggests that the consumer apply for a particular consumer lease with a particular lessor; or

(g) suggests that the consumer remain in a particular consumer lease with a particular lessor; or

(h) assists the consumer to apply for a particular consumer lease with a particular lessor.

It does not matter whether the person does so on the person’s own behalf or on behalf of another person.

9 Meaning of acts as an intermediary

A person acts as an intermediary if, in the course of, as part of, or incidentally to, a business carried on in this jurisdiction by the person or another person, the person:

(a) acts as an intermediary (whether directly or indirectly) between a credit provider and a consumer wholly or partly for the purposes of securing a provision of credit for the consumer under a credit contract for the consumer with the credit provider; or

(b) acts as an intermediary (whether directly or indirectly) between a lessor and a consumer wholly or partly for the purposes of securing a consumer lease for the consumer with the lessor.

It does not matter whether the person does so on the person’s own behalf or on behalf of another person.

10 Assignees of credit providers, lessors, mortgagees and beneficiaries of a guarantee

(1) For the purposes of this Act (other than the National Credit Code), a person is a credit provider, lessor, mortgagee or beneficiary of a guarantee whether the person is:

(a) the original credit provider, lessor, mortgagee or beneficiary of a guarantee under a credit contract, consumer lease, mortgage or guarantee; or

(b) a person to whom the rights of a credit provider, lessor, mortgagee or beneficiary of a guarantee under a credit contract, consumer lease, mortgage or guarantee have been assigned or passed by law.

Note: For example, a person who is assigned the rights of a credit provider under a credit contract would engage in a credit activity within the meaning of paragraph (a) of item 1 of the table in subsection 6(1).

(2) For the purposes of paragraph (1)(b), it does not matter whether an assignment or passing by law of rights is the first or a subsequent assignment or passing by law of those rights.

Division 4—Other definitions

12 When a business is carried on in this jurisdiction

(1) Division 3 of Part 1.2 of the Corporations Act 2001 applies for the purposes of working out whether a business is carried on in this jurisdiction.

(2) Without limiting subsection (1), a business is taken to be carried on in this jurisdiction by a person if, in the course of carrying on the business, the person engages in conduct that is:

(a) intended to induce people in this jurisdiction to use the goods or services the person provides; or

(b) is likely to have that effect;

whether or not the conduct is intended, or likely, to have that effect in other places as well.

13 Meaning of misleading

(1) A representation made by a person is misleading if:

(a) the representation relates to a future matter (including the doing of, or refusing to do, any act); and

(b) the person does not have reasonable grounds for making the representation.

(2) Subsection (1) does not limit the circumstances in which a representation may be misleading.

14 Meaning of person—generally includes a partnership

(1) This Act (other than the National Credit Code) applies to a partnership as if the partnership were a person, but it applies with the following changes:

(a) obligations that would be imposed on the partnership are imposed instead on each partner, but may be discharged by any of the partners;

(b) any contravention of this Act (other than the National Credit Code) that would otherwise be a contravention by the partnership is taken (whether for the purposes of criminal or civil liability) to have been a contravention by each partner who:

(i) aided, abetted, counselled or procured the relevant act or omission; or

(ii) was in any way knowingly concerned in, or party to, the relevant act or omission (whether directly or indirectly and whether by any act or omission of the partner).

Note: For the purposes of paragraph (b), to determine whether the partnership has contravened this Act, see section 325.

(2) For the purposes of this Act (other than the National Credit Code), a change in the composition of a partnership does not affect the continuity of the partnership.

(3) Subsections (1) and (2) have effect subject to:

(a) an express or implied contrary intention in a provision of this Act (other than the National Credit Code); and

(b) the regulations, which may exclude or modify the effect of those subsections in relation to specified provisions.

15 Meaning of person—generally includes multiple trustees

(1) This section applies in relation to a trust during a period while the trust continues to have:

(a) 2 or more trustees; or

(b) a single trustee who was a trustee of the trust at a time when it had 2 or more trustees.

(2) Subject to subsections (3) and (4), during the period this Act (other than the National Credit Code) applies to the trust as if the trustee or trustees of the trust from time to time during the period were a single person (the notional person) that remained the same for the duration of that period.

Note: So, for example, a licence granted under this Act during the period to the trustees of the trust will continue in force, despite a change in the persons who are the trustees.

(3) If, during the period or any part of the period, the trust has 2 or more trustees, this Act (other than the National Credit Code) applies to the trustees as referred to in subsection (2), but it applies with the following changes:

(a) obligations that would be imposed on the notional person are imposed instead on each trustee, but may be discharged by any of the trustees;

(b) any contravention of this Act (other than the National Credit Code) that would otherwise be a contravention by the notional person is taken (whether for the purposes of criminal or civil liability) to have been a contravention by each trustee who:

(i) aided, abetted, counselled or procured the relevant act or omission; or

(ii) was in any way knowingly concerned in, or party to, the relevant act or omission (whether directly or indirectly and whether by any act or omission of the trustee).

Note: For the purposes of paragraph (b), to determine whether the notional person has contravened this Act, see section 325.

(4) If, during the period or any part of the period, the trust has only one trustee, this Act (other than the National Credit Code) applies to the trustee as referred to in subsection (2), but it applies with the following changes:

(a) obligations that would be imposed on the notional person are imposed instead on that single trustee;

(5) Subsections (2), (3) and (4) have effect subject to:

(a) an express or implied contrary intention in a provision of this Act (other than the National Credit Code); and

(b) the regulations, which may exclude or modify the effect of those subsections in relation to specified provisions.

15A Meaning of associate

(1) If a person is associated with a credit provider for the purposes of the National Credit Code:

(a) the person is an associate of the credit provider; and

(b) the credit provider is an associate of the person.

(2) In any other case, a person is an associate of another person in the circumstances prescribed by the regulations.

15B Meaning of mortgage broker

(1) A licensee is a mortgage broker if:

(a) the licensee carries on a business of providing credit assistance in relation to credit contracts secured by mortgages over residential property; and

(b) the licensee does not perform the obligations, or exercise the rights, of a credit provider in relation to the majority of those credit contracts; and

(c) in carrying on the business, the licensee provides credit assistance in relation to credit contracts offered by more than one credit provider.

(2) A credit representative of a licensee is a mortgage broker if:

(a) the credit representative carries on a business of providing credit assistance in relation to credit contracts secured by mortgages over residential property; and

(b) neither the credit representative nor the licensee performs the obligations, or exercises the rights, of a credit provider in relation to the majority of those credit contracts; and

(c) in carrying on the business, the credit representative provides credit assistance in relation to credit contracts offered by more than one credit provider.

15C Meaning of mortgage intermediary

(1) A licensee is a mortgage intermediary if:

(a) the licensee carries on a business of acting as an intermediary in relation to credit contracts secured by mortgages over residential property; and

(b) the licensee does not perform the obligations, or exercise the rights, of a credit provider in relation to the majority of those credit contracts; and

(c) in carrying on the business, the licensee acts as an intermediary in relation to credit contracts offered by more than one credit provider.

(2) A credit representative of a licensee is a mortgage intermediary if:

(a) the credit representative carries on a business of acting as an intermediary in relation to credit contracts secured by mortgages over residential property; and

(b) neither the credit representative nor the licensee performs the obligations, or exercises the rights, of a credit provider in relation to the majority of those credit contracts; and

(c) in carrying on the business, the credit representative acts as an intermediary in relation to credit contracts offered by more than one credit provider.

16 Qualified privilege

(1) If this Act provides that a person has qualified privilege in relation to an act, matter or thing, then the person:

(a) has qualified privilege in proceedings for defamation; or

(b) is not, in the absence of malice on the person’s part, liable to an action for defamation at the suit of a person;

in relation to that act, matter or thing.

(2) Malice includes ill will to the person concerned or any other improper motive.

(3) Neither this section nor a provision of this Act that provides as referred to in subsection (1) limits or affects any right, privilege or immunity that a person has, apart from this section or such a provision, as defendant in proceedings, or an action, for defamation.

16A Meaning of control

(1) Control, of a body corporate, is:

(a) having the capacity to cast, or control the casting of, more than one half of the maximum number of votes that might be cast at a general meeting of the body corporate; or

(b) directly or indirectly holding more than one half of the issued share capital of the body corporate (not including any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital, and not including MCIs); or

(d) having the capacity to determine the outcome of decisions about the body corporate’s financial and operating policies, taking into account:

(i) the practical influence that can be exerted (rather than the rights that can be enforced); and

(ii) any practice or pattern of behaviour affecting the body corporate’s financial or operating policies (whether or not it involves a breach of an agreement or a breach of trust).

(2) Control, of a person other than a body corporate, is:

(a) having the capacity to control the composition of the person’s board or governing body (if any); or

(b) having the capacity to determine the outcome of decisions about the person’s financial and operating policies, taking into account:

(i) the practical influence that can be exerted (rather than the rights that can be enforced); and

(ii) any practice or pattern of behaviour affecting the person’s financial or operating policies (whether or not it involves a breach of an agreement or a breach of trust).

(3) For the purposes of paragraph (1)(b), MCI has the same meaning as in the Corporations Act 2001, and issued has the same meaning as in Chapter 7 of that Act.

16B Meaning of Registrar

A reference in this Act to the Registrar is a reference to:

(a) if only one Commonwealth body is appointed as Registrar under section 212A—that body; or

(b) if more than one Commonwealth body is appointed under that section:

(i) if the reference relates to one or more particular functions or powers—any Commonwealth body so appointed with any of those particular functions or powers; or

(ii) otherwise—any of the Commonwealth bodies appointed under that section.

Part 1‑3—Application of this Act and the Transitional Act

Division 1—Introduction

17 Guide to this Part

This Part deals with the application of this Act and the Transitional Act.

Division 2 is about the constitutional basis and geographical application of those Acts. It also deals with the application of those Acts to the Crown.

Division 3 deals with the interaction between those Acts and laws of the States and Territories.

Division 2—Constitutional basis and application of this Act and the Transitional Act

18 Constitutional basis for this Act and the Transitional Act

Application in a referring State

(1) The application of this Act and the Transitional Act in the referring States is based on:

(a) the legislative powers that the Commonwealth Parliament has under section 51 of the Constitution (other than paragraph 51(xxxvii)); and

(b) the legislative powers that the Commonwealth Parliament has because of a reference or an adoption by the Parliaments of the referring States under paragraph 51(xxxvii) of the Constitution.

Application in a Territory

(2) The application of this Act and the Transitional Act in a Territory is based on:

(a) the legislative powers that the Commonwealth Parliament has under section 122 of the Constitution to make laws for the government of a Territory; and

(b) the legislative powers that the Commonwealth Parliament has under section 51 of the Constitution.

Despite section 2H of the Acts Interpretation Act 1901, this Act and the Transitional Act as applying in the Territory are laws of the Commonwealth.

Application outside Australia

(3) The operation of this Act and the Transitional Act outside Australia is based on:

(a) the legislative power the Commonwealth Parliament has under paragraph 51(xxix) of the Constitution; and

(b) the other legislative powers that the Commonwealth Parliament has under section 51 of the Constitution; and

(c) the legislative powers that the Commonwealth Parliament has under section 122 of the Constitution to make laws for the government of a Territory.

Application in a non‑referring State

(4) The application of this Act and the Transitional Act in a State that is not a referring State is based on:

(a) the legislative powers that the Commonwealth Parliament has under section 51 (other than paragraph 51(xxxvii)) and section 122 of the Constitution; and

(b) the legislative powers that the Commonwealth Parliament has because of a reference or an adoption by the Parliaments of the referring States under paragraph 51(xxxvii) of the Constitution.

19 Meaning of referring State

Meaning of referring State

(1) A State is a referring State if, for the purposes of paragraph 51(xxxvii) of the Constitution, the Parliament of the State:

(a) has referred the matters covered by subsections (3) and (4) to the Commonwealth Parliament; or

(b) has:

(i) adopted the relevant version of this Act and the relevant version of the Transitional Act; and

(ii) referred the matter covered by subsection (4) to the Commonwealth Parliament.

(2) A State is a referring State even if the State’s referral law provides that:

(a) the reference to the Commonwealth Parliament of a matter covered by subsection (3) or (4) is to terminate in particular circumstances; or

(b) the adoption of the relevant version of this Act or the relevant version of the Transitional Act is to terminate in particular circumstances; or

(i) the matter of making provision with respect to the imposition or payment of State taxes, duties, charges or other imposts, however described; or

(ii) the matter of making provision with respect to the general system for the recording of estates or interests in land and related information; or

(iii) the matter of providing for the priority of interests in real property; or

(iv) the matter of making a law that excludes or limits the operation of a State law, to the extent that the State law makes provision with respect to the creation, holding, transfer, assignment, disposal or forfeiture of a State statutory right; or

(d) the reference to the Commonwealth Parliament of a matter covered by subsection (3) or (4) has effect only:

(i) if and to the extent that the matter is not included in the legislative powers of the Commonwealth Parliament (otherwise than by a reference under section 51(xxxvii) of the Constitution); or

(ii) if and to the extent that the matter is included in the legislative powers of the Parliament of the State.

Reference covering the relevant versions of this Act and the Transitional Act

(3) This subsection covers the matters to which the referred provisions relate to the extent of the making of laws with respect to those matters by including the referred provisions in the relevant version of this Act and the relevant version of the Transitional Act.

Reference covering amendments of this Act or the Transitional Act

(4) This subsection covers a referred credit matter (see section 20) to the extent of the making of laws with respect to that matter by making express amendments of this Act or the Transitional Act.

Effect of terminating reference or adoption of relevant versions

(5) A State ceases to be a referring State if:

(a) in the case where the Parliament of the State has referred to the Commonwealth Parliament the matters covered by subsection (3)—that reference terminates; or

(b) in the case where the Parliament of the State has adopted the relevant version of this Act and the relevant version of the Transitional Act—the adoption of the relevant version of this Act or the relevant version of the Transitional Act terminates.

Effect of terminating amendment reference

(6) A State ceases to be a referring State if:

(a) the State’s amendment reference terminates; and

(b) subsection (7) does not apply to the termination.

(7) A State does not cease to be a referring State because of the termination of its amendment reference if:

(a) the termination is effected by the Governor of that State fixing a day by Proclamation as the day on which the reference terminates; and

(b) the day fixed is no earlier than the first day after the end of the period of 6 months beginning on the day on which the Proclamation is published; and

Definitions

(8) In this section:

amendment reference of a State means the reference by the Parliament of the State to the Parliament of the Commonwealth of the matter covered by subsection (4).

express amendment of this Act or the Transitional Act means the direct amendment of the text of this Act or the Transitional Act (whether by the insertion, omission, repeal, substitution or relocation of words or matter) by another Commonwealth Act or by an instrument under a Commonwealth Act, but does not include the enactment by a Commonwealth Act of a provision that has, or will have, substantive effect otherwise than as part of the text of this Act or the Transitional Act.

forfeiture means confiscation, seizure, extinguishment, cancellation, suspension or any other forfeiture.

referral law, of a State, means the Act of the State that refers the matter covered by subsection (4) to the Commonwealth Parliament.

referred provisions means:

(a) the relevant version of this Act; and

(b) the relevant version of the Transitional Act;

to the extent to which they deal with matters that are included in the legislative powers of the Parliaments of the States.

relevant version of the Transitional Act means the Transitional Act as originally enacted.

relevant version of this Act means:

(a) if, at the time the State’s referral law was enacted, this Act had not been enacted—this Act as originally enacted; or

(b) otherwise—this Act as originally enacted, and as later amended by the National Consumer Credit Protection Amendment Act 2010.

State law means:

(a) any Act of the State or any instrument made under such an Act, whenever enacted or made and as in force from time to time; or

(b) the general law, being the principles and rules of common law and equity to the extent that they have effect in the State from time to time.

State statutory right means a right, entitlement or authority that is granted by or under any Act of the State or any instrument made under such an Act, whenever enacted or made and as in force from time to time, other than a right, entitlement or authority that relates to:

(a) credit covered by paragraph (a) of the definition of referred credit matter; or

(b) a consumer lease covered by paragraph (b) of that definition.

20 Meaning of referred credit matter

(1) Referred credit matter means a matter relating to either of the following:

(a) credit, being credit the provision of which would be covered by the expression “provision of credit to which this Code applies” in the initial National Credit Code;

(b) consumer leases, being consumer leases each of which would be covered by the expression “consumer lease to which Part 11 applies” in the initial National Credit Code.

(2) Initial National Credit Code means Schedule 1 to the relevant version of this Act (within the meaning of subsection 19(8)).

21 General application of this Act and the Transitional Act

Application in this jurisdiction

(1) Each provision of this Act and the Transitional Act applies in this jurisdiction.

Geographical coverage of “this jurisdiction”

(2) This jurisdiction means the geographical area that consists of:

(a) each referring State (including its coastal sea); and

(b) each Territory (including its coastal sea).

(3) Throughout this Act and the Transitional Act, this jurisdiction therefore consists of either:

(a) if all of the States are referring States—the whole of Australia; or

(b) if one or more States are not referring States—Australia (other than any State that is not a referring State).

Application outside this jurisdiction

(4) Subject to subsection (5), each provision of this Act and the Transitional Act also applies, according to its tenor, in relation to acts and omissions outside this jurisdiction.

Application in non‑referring States

(5) This Act does not apply to an act or omission in a State that is not a referring State to the extent to which that application would be beyond the legislative powers of the Parliament (including powers it has under paragraphs 51(xxxvii) and (xxxix) of the Constitution).

Residence, place of formation etc.

(6) Each provision of this Act and the Transitional Act applies, according to its tenor, to:

(a) natural persons whether:

(i) resident in this jurisdiction or not; and

(ii) resident in Australia or not; and

(iii) Australian citizens or not; and

(b) all bodies corporate and unincorporated bodies whether:

(i) formed or carrying on a business in this jurisdiction or not; and

(ii) formed or carrying on a business in Australia or not.

22 When Acts bind Crown

(1) This Act (other than the National Credit Code) and the Transitional Act do not bind the Crown in any of its capacities.

(2) Despite subsection (1), the regulations may provide that this Act (other than the National Credit Code) and the Transitional Act, or specified provisions of this Act (other than the National Credit Code) or the Transitional Act, bind either or both of the following in circumstances (if any) prescribed by the regulations:

(a) the Crown in right of the Commonwealth;

(b) the Crown in all of its other capacities.

(3) The National Credit Code binds the Crown in each of its capacities.

(4) This Act and the Transitional Act do not make the Crown liable to be prosecuted for an offence or to any pecuniary penalty.

Division 3—Interaction between the Commonwealth credit legislation and State and Territory laws

23 Concurrent operation intended

(1) This Act and the Transitional Act (the Commonwealth credit legislation) are not intended to exclude or limit the concurrent operation of any law of a State or Territory.

(2) If:

(a) an act or omission of a person is both an offence against the Commonwealth credit legislation and an offence against the law of a State or Territory; and

(b) the person is convicted of either of those offences;

the person is not liable to be convicted of the other of those offences.

(3) This section does not apply to a law of a State or Territory if there is a direct inconsistency between that law and the Commonwealth credit legislation.

Note: Section 25 avoids direct inconsistency arising in some cases by limiting the operation of the Commonwealth credit legislation.

24 When Commonwealth credit legislation does not apply

(1) Subsection (2) applies if a provision of a law of a referring State or a Territory declares a matter to be an excluded matter for the purposes of this section in relation to:

(a) the whole of the Commonwealth credit legislation; or

(b) a specified provision of the Commonwealth credit legislation; or

(d) the Commonwealth credit legislation otherwise than to a specified extent.

(2) By force of this subsection:

(a) none of the provisions of the Commonwealth credit legislation (other than this section) applies in or in relation to the State or Territory with respect to the matter if the declaration is one to which paragraph (1)(a) applies; and

(b) the specified provision of the Commonwealth credit legislation does not apply in or in relation to the State or Territory with respect to the matter if the declaration is one to which paragraph (1)(b) applies; and

(c) the provisions of the Commonwealth credit legislation (other than this section and the specified provisions) do not apply in or in relation to the State or Territory with respect to the matter if the declaration is one to which paragraph (1)(c) applies; and

(d) the provisions of the Commonwealth credit legislation (other than this section and otherwise than to the specified extent) do not apply in or in relation to the State or Territory with respect to the matter if the declaration is one to which paragraph (1)(d) applies.

(3) Subsection (2) does not apply to the declaration to the extent to which the regulations provide that that subsection does not apply to that declaration.

25 Avoiding direct inconsistency between Commonwealth and State and Territory laws

This section overrides other Commonwealth credit legislation

(1) This section has effect despite anything else in the Commonwealth credit legislation.

When this section does not apply to a State or Territory law

(2) This section does not apply to a provision of a law of a referring State or a Territory that is capable of concurrent operation with the Commonwealth credit legislation.

Note: This kind of provision is dealt with by section 23.

When this section applies to a State or Territory law

(3) This section applies to the interaction between a provision (the displacement provision) of a law of a referring State or a Territory and a provision (the Commonwealth provision) of the Commonwealth credit legislation only if the displacement provision is declared by a law of the State or Territory to be a Commonwealth credit legislation displacement provision for the purposes of this section (either generally or specifically in relation to the Commonwealth provision).

Effect of displacement provision

(4) The Commonwealth provision does not:

(a) prohibit the doing of an act; or

(b) impose a liability (whether civil or criminal) for doing an act;

if the displacement provision specifically permits, authorises or requires the doing of that act.

(5) The Commonwealth provision does not operate in or in relation to the State or Territory to the extent necessary to ensure that no inconsistency arises between:

(a) the Commonwealth provision; and

(b) the displacement provision to the extent to which the displacement provision would, apart from this subsection, be inconsistent with the Commonwealth provision.

Note 1: The displacement provision is not covered by this subsection if subsection (4) applies to the displacement provision: if that subsection applies there would be no potential inconsistency to be dealt with by this subsection.

Note 2: The operation of the displacement provision will be supported by section 23 to the extent to which it can operate concurrently with the Commonwealth provision.

(6) Subsections (4) and (5) do not apply in relation to the displacement provision to the extent to which the regulations provide that those subsections do not apply in relation to the displacement provision.

26 Regulations to deal with interaction between laws

(1) The regulations may modify the operation of the Commonwealth credit legislation so that:

(a) provisions of the Commonwealth credit legislation do not apply to a matter that is dealt with by a law of a referring State or a Territory specified in the regulations; or

(b) no inconsistency arises between the operation of a provision of the Commonwealth credit legislation and the operation of a provision of a law of a referring State or a Territory specified in the regulations.

(2) Without limiting subsection (1), regulations made for the purposes of that subsection may provide that a provision of the Commonwealth credit legislation:

(a) does not apply to:

(i) a person specified in the regulations; or

(ii) a body specified in the regulations; or

(iii) circumstances specified in the regulations; or

(iv) a person or body specified in the regulations in the circumstances specified in the regulations; or

(b) does not prohibit an act to the extent to which the prohibition would otherwise give rise to an inconsistency with a law of a referring State or a Territory; or

(c) does not require a person to do an act to the extent to which the requirement would otherwise give rise to an inconsistency with a law of a referring State or a Territory; or

(d) does not authorise a person to do an act to the extent to which the conferral of that authority on the person would otherwise give rise to an inconsistency with a law of a referring State or a Territory; or

(e) does not impose an obligation on a person to the extent to which complying with that obligation would require the person not to comply with an obligation imposed on the person under a law of a referring State or a Territory; or

(f) authorises a person to do something for the purposes of the Commonwealth credit legislation that the person:

(i) is authorised to do under a law of a referring State or a Territory; and

(ii) would not otherwise be authorised to do under the Commonwealth credit legislation; or

(g) will be taken to be satisfied if a law of a referring State or a Territory is satisfied.

Chapter 2—Licensing of persons who engage in credit activities

Part 2‑1—Requirement to be licensed to engage in credit activities

Division 1—Introduction

27 Guide to this Part

This Part is about the licensing of persons to engage in credit activities. In general, a person cannot engage in a credit activity if the person does not hold an Australian credit licence.

Division 2 prohibits a person from engaging in credit activities without an Australian credit licence. However, the prohibition does not apply to employees and directors of licensees or related bodies corporate of licensees, or to credit representatives of licensees.

Division 3 deals with other prohibitions relating to the requirement to be licensed and to credit activities. These prohibitions relate to holding out and advertising, conducting business with unlicensed persons, and charging fees for unlicensed conduct.

Division 2—Engaging in credit activities without a licence

28 Application of this Division

This Division applies on or after 1 July 2011, or a later day prescribed by the regulations.

29 Prohibition on engaging in credit activities without a licence

Prohibition on engaging in credit activities without a licence

(1) A person must not engage in a credit activity if the person does not hold a licence authorising the person to engage in the credit activity.

Civil penalty: 5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 2 years imprisonment.

Defences

(3) For the purposes of subsections (1) and (2), it is a defence if:

(a) the person engages in the credit activity on behalf of another person (the principal); and

(b) the person is:

(i) an employee or director of the principal or of a related body corporate of the principal; or

(ii) a credit representative of the principal; and

(d) the principal holds a licence authorising the principal to engage in the credit activity.

Note: For the purposes of subsection (2), a defendant bears an evidential burden in relation to the matter in subsection (3) (see subsection 13.3(3) of the Criminal Code).

(4) For the purposes of subsections (1) and (2), it is a defence if:

(a) the person engages in the credit activity on behalf of another person (the principal); and

(b) the person is a representative of the principal; and

(d) the principal is exempted from subsections (1) and (2) under paragraph 109(1)(a), 109(3)(a) or 110(1)(a).

Note: For the purposes of subsection (2), a defendant bears an evidential burden in relation to the matter in subsection (4) (see subsection 13.3(3) of the Criminal Code).

Division 3—Other prohibitions relating to the requirement to be licensed

30 Prohibitions on holding out and advertising etc.

Prohibitions on holding out and advertising etc.

(1) A person must not hold out:

(a) that the person holds a licence; or

(b) that the person holds a licence authorising the person to engage in a particular credit activity; or

(c) that a credit activity engaged in by the person or by someone else is exempt from a requirement to hold a licence; or

(d) that, in engaging in a credit activity, the person acts on behalf of another person; or

(e) that conduct, or proposed conduct, of the person is within the authority of a licensee;

if that is not the case.

Civil penalty: 5,000 penalty units.

(2) A person must not hold out or advertise that the person engages or is able to engage in a credit activity if the person would, if the person engaged in the credit activity, contravene section 29 (which deals with the requirement to be licensed).

Civil penalty: 5,000 penalty units.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1) or (2); and

(b) the person engages in conduct; and

Criminal penalty: 1 year imprisonment.

31 Prohibition on conducting business with unlicensed persons

Prohibition on conducting business with unlicensed persons

(1) A licensee must not:

(a) engage in a credit activity; and

(b) in the course of engaging in that credit activity, conduct business with another person who is engaging in a credit activity;

if, by engaging in the credit activity, the other person contravenes section 29 (which deals with the requirement to be licensed).

Civil penalty: 5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 2 years imprisonment.

32 Prohibition on charging a fee etc.

Prohibition on charging a fee etc.

(1) A person must not demand, receive or accept any fee, charge or other amount from a consumer for engaging in a credit activity if, by engaging in that credit activity, the person contravenes, or would contravene, section 29 (which deals with the requirement to be licensed).

Civil penalty: 5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 1 year imprisonment.

Part 2‑2—Australian credit licences

Division 1—Introduction

34 Guide to this Part

This Part is about Australian credit licences.

Division 2 explains what an Australian credit licence is and the credit activities that are authorised by it.

Division 3 is about how to get an Australian credit licence, including how to apply for it and when ASIC may grant or refuse to grant it.

Division 4 is about the conditions that may be imposed on an Australian credit licence.

Division 5 is about conduct obligations of licensees.

Division 6 is about the suspension, cancellation or variation of an Australian credit licence.

Division 2—Australian credit licences

35 Australian credit licences

(1) An Australian credit licence is a licence that authorises the licensee to engage in particular credit activities.

(2) The credit activities that the licensee is authorised to engage in are those credit activities specified in a condition of the licence as the credit activities that the licensee is authorised to engage in.

Division 3—How to get an Australian credit licence

36 Applying for a licence

(1) A person may apply for a licence by lodging an application with ASIC on or after 1 July 2010, or a later day prescribed by the regulations.

(2) The application must be in the approved form.

37 When a licence may be granted—applicants other than ADIs

When ASIC must grant a licence

(1) ASIC must grant a person (other than an ADI) a licence if (and must not grant the person a licence unless):

(a) the person has applied for the licence in accordance with section 36; and

(b) ASIC has no reason to believe that the person is likely to contravene the obligations that will apply under section 47 if the licence is granted; and

(c) the requirement in section 37A (fit and proper person test) is satisfied in relation to the applicant and the licence applied for; and

(e) the person meets any other requirements prescribed by the regulations.

Note: ASIC must not grant a licence to a person contrary to a banning order or disqualification order, or if a prescribed State or Territory order is in force against the person or certain representatives of the person (see section 40).

False, misleading or incomplete information

(2) ASIC must refuse to grant the licence if ASIC is satisfied that:

(a) the application for the licence, or any information, audit report or statement lodged with ASIC in accordance with subsection (4), was false in a material particular or materially misleading; or

(b) there was an omission of a material matter from the application or the information, audit report or statement.

ASIC may request information etc. from applicant

(4) ASIC may give a written notice to a person who has applied for a licence requesting the person to lodge with ASIC, within the time specified in the notice, any of the following:

(a) information specified in the notice in relation to any matters that ASIC may have regard to in deciding whether to grant the licence;

(b) an audit report, prepared by a suitably qualified person specified in the notice, in relation to matters that ASIC may have regard to in deciding whether to grant the licence;

(i) informs ASIC of any material changes in any information provided to ASIC in, or in connection with, the application; or

(ii) confirms that there have been no such changes.

(5) To avoid doubt:

(a) a notice under subsection (4), and the information, audit report or statement requested in the notice, may relate to any person mentioned in section 37A in relation to the applicant and the licence applied for; and

(b) subsection (7) applies in relation to such a request even if the applicant is unable to comply with the request.

(6) ASIC may, by written notice to the applicant before the time specified in the notice:

(a) withdraw a request under subsection (4); or

(b) extend the time specified in the notice.

(7) If the applicant does not lodge with ASIC the information, audit report or statement requested by ASIC in a notice under subsection (4) within the specified time, the applicant is taken to have withdrawn the application.

(8) To avoid doubt, section 41 does not apply to an application that is taken to have been withdrawn under subsection (7) of this section.

37A Fit and proper person test

(1) For the purposes of paragraph 37(1)(c), subsection 46A(2) and paragraph 55(1)(c), the requirement in this section is satisfied in relation to a person (the first person) and a licence, or a proposed licence, if ASIC is satisfied that there is no reason to believe any of the following:

(a) that the first person is not a fit and proper person to engage in the credit activities authorised by the licence;

(b) if the first person is a body corporate—that an officer (within the meaning of the Corporations Act 2001) of the first person is not a fit and proper person to perform one or more functions as an officer of a person that engages in the credit activities authorised by the licence;

(i) that any of the partners or trustees are not fit and proper persons to engage in the credit activities authorised by the licence; or

(ii) that any of the senior managers of the partnership or the trust are not fit and proper persons to perform one or more functions as an officer (within the meaning of the Corporations Act 2001) of a person that engages in the credit activities authorised by the licence;

(d) that any person who controls the first person is not a fit and proper person to control a person that engages in the credit activities authorised by the licence;

(e) if a controller mentioned in paragraph (d) is a body corporate—that an officer (within the meaning of the Corporations Act 2001) of the controller is not a fit and proper person to perform one or more functions as an officer of an entity (as defined by section 64A of that Act) that controls a person that engages in the credit activities authorised by the licence;

(f) if a controller mentioned in paragraph (d) is a partnership or the multiple trustees of a trust:

(i) that any of the partners or trustees are not fit and proper persons to control a person that engages in the credit activities authorised by the licence; or

(ii) that any of the senior managers of the partnership or the trust are not fit and proper persons to perform one or more functions as an officer (within the meaning of the Corporations Act 2001) of an entity (as defined by section 64A of that Act) that controls a person that engages in the credit activities authorised by the licence.

(2) In considering whether a person is fit and proper for a purpose mentioned in subsection (1), ASIC must have regard to the matters in section 37B.

37B Fit and proper person test—matters to which ASIC must have regard

(1) ASIC must have regard to the matters set out in subsection (2) (subject to Part VIIC of the Crimes Act 1914) for the purposes of applying any of the following provisions to a person:

(a) a paragraph of subsection 37A(1);

(b) paragraph 80(1)(f).

Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them.

(2) The matters are as follows:

(a) whether any of the following of the person has ever been suspended or cancelled:

(i) a licence, or a registration under the Transitional Act;

(ii) an Australian financial services licence;

(b) whether any of the following has ever been made against the person:

(i) a banning order, or a disqualification order under Part 2‑4;

(ii) a banning order, or a disqualification order, under Division 8 of Part 7.6 of the Corporations Act 2001;

(c) if the person is an individual—whether the person has ever been disqualified under the Corporations Act 2001, or any other law of the Commonwealth or of a State or Territory, from managing corporations;

(d) whether the person has ever been banned from engaging in a credit activity under a law of a State or Territory;

(e) whether the person has ever been linked to a refusal or failure to give effect to a determination made by AFCA (within the meaning of the Corporations Act 2001);

(f) if the person is not the multiple trustees of a trust—whether the person has ever been insolvent;

(g) if the person is the multiple trustees of a trust—whether a trustee of the trust has ever been insolvent;

(h) whether, in the last 10 years, the person has been convicted of an offence;

(i) any relevant information given to ASIC by a State or Territory, or an authority of a State or Territory, in relation to the person;

(j) any other matter prescribed by the regulations;

(k) any other matter ASIC considers relevant.

38 When a licence may be granted—ADIs

If:

(a) an ADI applies under section 36 for a licence; and

(b) the application includes a statement (in accordance with the requirements of the approved form) to the effect that the ADI will, if granted the licence, comply with its obligations as a licensee;

then ASIC must grant the ADI a licence authorising the ADI to engage in credit activities that equate (as closely as possible) to the credit activities in relation to which the application was made.

39 Regulations may prescribe streamlined process for other applicants

Despite sections 36 and 37, the regulations may provide that:

(a) some or all of sections 36 and 37 do not apply in relation to particular classes of applicants; and

(b) alternative processes apply to applications for licences by, and the grant of licences to, those classes of applicants.

40 Licences must not be granted to certain applicants

Banning or disqualification order in force against person

(1) Despite subsection 37(1) and section 38, ASIC must not grant a licence that authorises a person to engage in a credit activity if a banning order or disqualification order under Part 2‑4 is in force against the person in relation to that credit activity.

Prescribed State or Territory order in force against person etc.

(2) Despite subsection 37(1) and section 38, ASIC must not grant a licence to a person if:

(a) the person is a natural person against whom a prescribed State or Territory order is in force; or

(b) the person is a body corporate, and a prescribed State or Territory order is in force against a director, secretary or senior manager of the body corporate who would perform duties in relation to the credit activities to be authorised by the licence; or

(c) the person is a partnership or the trustees of a trust, and a prescribed State or Territory order is in force against a partner or trustee who would perform duties in relation to the credit activities to be authorised by the licence.

41 Applicant must be given hearing before refusal of licence

ASIC may only refuse to grant a licence after giving the person who applied for the licence an opportunity:

(a) to appear, or be represented, at a hearing before ASIC that takes place in private; and

(b) to make submissions to ASIC in relation to the refusal.

42 Notice of grant or refusal of licence and date of effect

(1) ASIC must give a person (the applicant) who has applied for a licence written notice of:

(a) ASIC’s decision on the application; and

(b) if the decision is to grant the applicant a licence—the day on which the licence takes effect; and

(2) The licence comes into force on the day specified in the notice, which must not be before the day on which the decision to grant the licence was made.

43 Australian credit licence numbers

(1) ASIC must allocate each licence a unique Australian credit licence number when it is granted.

(2) If:

(a) a person is granted a licence; and

(b) the person holds an Australian financial services licence;

then the Australian credit licence number that ASIC gives to the licence held by that person must be the same number as the person’s Australian financial services licence number.

(3) ASIC must give the licensee written notice of the Australian credit licence number.

44 Basis on which licence is granted

A licence granted under this Division is granted on the basis that:

(a) conditions on the licence may be imposed, varied or revoked under section 45 or 46; and

(b) the licence may be suspended under section 54, 55 or 56; and

(d) the licence may be varied under section 57; and

(e) the licence may be cancelled, revoked, terminated or varied by or under later legislation; and

(f) no compensation is payable if:

(i) conditions on the licence are imposed, varied or revoked as referred to in paragraph (a); or

(ii) the licence is suspended, cancelled, varied, revoked or terminated as referred to in paragraphs (b) to (e).

Division 4—Conditions on an Australian credit licence

45 The conditions on the licence

ASIC may impose, vary or revoke conditions on licences

(1) Subject to section 46A, ASIC may, at any time:

(a) impose conditions, or additional conditions, on a licence; and

(b) vary or revoke conditions imposed on a licence.

(2) ASIC may do so:

(a) on its own initiative; or

(b) if the licensee lodges an application with ASIC for the imposition, variation or revocation.

(3) The application must be in the approved form.

Notice and effect of imposition, variation or revocation of conditions

(4) ASIC must give the licensee written notice of the imposition, variation or revocation of the conditions. The imposition, variation or revocation of the conditions comes into force on the day specified in the notice, which must not be before the day on which the decision to impose, vary or revoke the conditions was made.

ASIC must give the licensee a hearing

(5) Despite subsection (1), ASIC may only impose conditions or additional conditions, or vary or revoke the conditions, on the licence after giving the licensee an opportunity:

(a) to appear, or be represented, at a hearing before ASIC that takes place in private; and

(b) to make submissions to ASIC in relation to the conditions.

This subsection does not apply to ASIC imposing conditions when the licence is granted, or imposing or varying conditions in accordance with an application under paragraph (2)(b).

Condition in relation to credit activities authorised

(6) ASIC must ensure that the licence is subject to a condition that specifies the credit activities or classes of credit activities that the licensee is authorised to engage in.

Regulations may prescribe conditions

(7) The licence is subject to such other conditions as are prescribed by the regulations. However, ASIC cannot vary or revoke those conditions.

46 Licence conditions—special procedures for APRA‑regulated bodies

Special procedures for APRA‑regulated bodies (other than ADIs)

(1) If the licensee, or a related body corporate, is a body (the APRA body) regulated by APRA (other than an ADI), then the following provisions apply:

(a) ASIC cannot:

(i) impose, vary or revoke a condition on the licence that, in ASIC’s opinion, has or would have the result of preventing the APRA body from being able to carry on all or any of its usual activities (being activities in relation to which APRA has regulatory or supervisory responsibilities); or

(ii) vary a condition so that it would, in ASIC’s opinion, become a condition that would have a result as described in subparagraph (i);

unless ASIC has first consulted APRA about the proposed action;

(b) if ASIC imposes, varies or revokes a condition on the licence and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken.

Special procedures for ADIs

(2) If the licensee, or a related body corporate, is an ADI, then the following provisions apply:

(a) subject to paragraphs (b) and (c), the powers that ASIC would otherwise have under section 45:

(i) to impose, vary or revoke a condition on the licence that, in ASIC’s opinion, has or would have the result of preventing the ADI from being able to carry on all or any of its banking business (within the meaning of the Banking Act 1959); or

(ii) to vary a condition so that it would, in ASIC’s opinion, become a condition that would have a result as described in subparagraph (i);

are instead powers of the Minister;

(b) the following provisions apply in relation to a power to which paragraph (a) applies:

(i) the procedures for the exercise of the power are the same as would apply if ASIC could exercise the power, except that the Minister must not exercise the power unless he or she has first considered advice from ASIC on the proposed action, being advice given after ASIC has consulted APRA about the proposed action;

(ii) ASIC (rather than the Minister) must still conduct any hearing required under paragraph 45(5)(a) and receive any submissions under paragraph 45(5)(b);

(c) if ASIC imposes, varies or revokes a condition on the licence and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken.

46A ASIC may request information etc. in relation to an application for conditions to be varied

(1) This section applies if a licensee applies under paragraph 45(2)(b) for ASIC to:

(a) impose conditions, or additional conditions, on the licence; or

(b) vary or revoke conditions imposed on the licence.

However, this section does not apply in relation to a power to which paragraph 46(2)(a) applies.

(2) ASIC must not grant the application unless the requirement in section 37A (fit and proper person test) is satisfied in relation to the applicant and the licence as proposed to be varied.

ASIC may request information etc. from applicant

(3) ASIC may give a written notice to the applicant requesting the applicant to lodge with ASIC, within the time specified in the notice, any of the following:

(a) information specified in the notice in relation to any matters that ASIC must have regard to for the purposes of deciding whether the requirement in section 37A is satisfied as mentioned in subsection (2) of this section;

(b) an audit report, prepared by a suitably qualified person specified in the notice, in relation to matters that ASIC must have regard to for the purposes of deciding whether the requirement in section 37A is satisfied as mentioned in subsection (2) of this section;

(i) informs ASIC of any material changes in any information provided to ASIC in, or in connection with, the application; or

(ii) confirms that there have been no such changes.

(4) To avoid doubt:

(a) a notice under subsection (3), and the information, audit report or statement requested in the notice, may relate to any person mentioned in section 37A in relation to the applicant and the licence as proposed to be varied; and

(b) subsection (6) applies in relation to such a request even if the applicant is unable to comply with the request.

(5) ASIC may, by written notice to the applicant within the time specified in the notice:

(a) withdraw the request; or

(b) extend the time specified in the notice.

(6) If the applicant does not lodge with ASIC the information, audit report or statement requested by ASIC in a notice under subsection (3) within the specified time, the applicant is taken to have withdrawn the application.

(7) To avoid doubt, subsection (8) does not apply to an application that is taken to have been withdrawn under subsection (6).

Applicant must be given hearing before refusal of application

(8) ASIC may only refuse to grant the application after giving the applicant an opportunity:

(a) to appear, or be represented, at a hearing before ASIC that takes place in private; and

(b) to make submissions to ASIC in relation to the matter.

Division 5—Obligations of licensees

Subdivision A—General obligations

47 General conduct obligations of licensees

General conduct obligations

(1) A licensee must:

(a) do all things necessary to ensure that the credit activities authorised by the licence are engaged in efficiently, honestly and fairly; and

(b) have in place adequate arrangements to ensure that clients of the licensee are not disadvantaged by any conflict of interest that may arise wholly or partly in relation to credit activities engaged in by the licensee or its representatives; and

(d) comply with the credit legislation; and

(e) take reasonable steps to ensure that its representatives comply with the credit legislation; and

(ea) comply with the Reference Checking and Information Sharing Protocol; and

(f) maintain the competence to engage in the credit activities authorised by the licence; and

(g) ensure that its representatives are adequately trained, and are competent, to engage in the credit activities authorised by the licence; and

(h) have an internal dispute resolution procedure that:

(i) complies with standards and requirements made or approved by ASIC in accordance with the regulations; and

(ii) covers disputes in relation to the credit activities engaged in by the licensee or its representatives; and

(ha) give to ASIC the same information it would be required to give under subparagraph 912A(1)(g)(ii) of the Corporations Act 2001 if it were a financial services licensee; and

(i) be a member of the AFCA scheme; and

(j) have compensation arrangements in accordance with section 48; and

(k) have adequate arrangements and systems to ensure compliance with its obligations under this section, and a written plan that documents those arrangements and systems; and

(l) unless the licensee is a body regulated by APRA:

(i) have available adequate resources (including financial, technological and human resources) to engage in the credit activities authorised by the licence and to carry out supervisory arrangements; and

(ii) have adequate risk management systems; and

(m) comply with any other obligations that are prescribed by the regulations.

Assessment of whether compliance is adequate

(2) For the purposes of paragraphs (1)(b), (g), (k) and (l), in considering whether a matter is adequate, the nature, scale and complexity of the credit activities engaged in by the licensee must be taken into account.

Regulations in relation to internal dispute resolution procedures

(3) Regulations made for the purposes of paragraph (1)(h) may also deal with the variation or revocation of:

(a) standards or requirements made by ASIC; or

(b) approvals given by ASIC.

Reference Checking and Information Sharing Protocol

(3A) ASIC may, by legislative instrument, determine a protocol for sharing and requesting information about an individual in respect of whom there are reasonable grounds to suspect that:

(a) if the individual becomes a representative of a licensee (recruiting credit licensee), the individual will:

(i) provide credit assistance in relation to credit contracts secured by mortgages over residential property; and

(ii) be a mortgage broker or a director, employee or agent of a mortgage broker; or

(b) a mortgage intermediary (prospective mortgage intermediary) is acting, or will act, as an intermediary in relation to a licensee where the individual is, or is a former, current or prospective representative of, that licensee, and in that capacity the individual:

(i) provides, provided or will provide credit assistance in relation to credit contracts secured by mortgages over residential property; and

(ii) is, was or will be a mortgage broker or a director, employee or agent of a mortgage broker; or

(c) if the individual becomes a representative of a financial services licensee (recruiting financial services licensee), the individual will provide personal advice to retail clients about relevant financial products.

(3AA) The Reference Checking and Information Sharing Protocol may provide for any or all of the following to share information about the individual with the recruiting credit licensee, the prospective mortgage intermediary or the recruiting financial services licensee:

(a) if the individual is a licensee—the individual;

(b) if the individual is a former or current representative of a licensee—that licensee;

(c) if a mortgage intermediary has previously acted or is acting as an intermediary in relation to a licensee where the individual is, or is a former or current representative of, that licensee—that mortgage intermediary;

(3AB) The Reference Checking and Information Sharing Protocol may provide, in a case covered by paragraph (3A)(a) or (b), for the recruiting credit licensee or the prospective mortgage intermediary to request information about the individual from any or all of the following:

(a) if the individual is a licensee or a financial services licensee—the individual;

(b) if the individual is a former or current representative of a licensee—that licensee;

(c) if the individual is a former or current representative of a financial services licensee—that financial services licensee;

(d) if a mortgage intermediary has previously acted or is acting as an intermediary in relation to a licensee where the individual is, or is a former or current representative of, that licensee—that mortgage intermediary.

(3AC) The Reference Checking and Information Sharing Protocol may provide for keeping and retaining records of information shared, and the circumstances under which that information is shared.

(3B) The Reference Checking and Information Sharing Protocol must not:

(a) require or permit personal information (within the meaning of the Privacy Act 1988) to be shared, other than with the consent of the individual to whom the information relates; or

(b) require information to be shared in relation to conduct that occurred more than 5 years before the information is shared.

(3E) Expressions used in paragraphs (3A)(c) and (3AB)(c) that are also used in the Corporations Act 2001 (other than Reference Checking and Information Sharing Protocol) have the same meaning in that subsection as they have in that Act.

Qualified privilege

(3F) A person has qualified privilege in relation to information shared in accordance with the Reference Checking and Information Sharing Protocol.

(3G) A person who has qualified privilege under subsection (3F) in respect of conduct is also not liable for any action based on breach of confidence in relation to that conduct.

Civil penalty for non‑compliance

(4) The licensee must not contravene paragraph (1)(a), (b), (e), (ea), (f), (g), (h), (i), (j), (k), (l) or (m).

Civil penalty: 5,000 penalty units.

Note: Contravening paragraphs (1)(c) (obligation to comply with conditions on the licence) and (d) (compliance with the credit legislation) has consequences under other provisions.

48 Requirements for compensation arrangements

Requirement to have adequate compensation arrangements

(1) A licensee must have adequate arrangements for compensating persons for loss or damage suffered because of a contravention of this Act by the licensee or its representatives.

When arrangements are adequate

(2) For the purposes of subsection (1), arrangements are adequate if, and only if, they:

(a) satisfy any requirements prescribed by the regulations; or

(b) are approved in writing by ASIC.

Approval of arrangements by ASIC

(3) Before approving arrangements under paragraph (2)(b), ASIC must have regard to:

(a) the credit activities authorised by the licence; and

(b) whether the arrangements will continue to cover persons after the licensee ceases to engage in credit activities, and the length of time for which that cover will continue; and

(4) Without limiting paragraph (3)(c), the regulations may, in particular, prescribe additional details in relation to the matters to which ASIC must have regard under paragraphs (3)(a) and (b).

Subdivision B—Providing information and assistance to ASIC

49 Obligation to provide a statement or obtain an audit report if directed by ASIC

Notice to licensee to provide a statement

(1) ASIC may give a licensee a written notice directing the licensee to lodge with ASIC a written statement containing specified information about:

(a) the credit activities engaged in by the licensee or its representatives; or

(b) for the purposes of considering whether the requirement in section 37A (fit and proper person test) is satisfied in relation to the licensee and the licence—any matters mentioned in section 37B in relation to a person mentioned in a paragraph of subsection 37A(1).

(2) Notices under subsection (1):

(a) may be given at any time; and

(b) may be given to one or more particular licensees, or to each licensee in one or more classes of licensee, or to all licensees; and

(d) may require a statement containing information to be given on a periodic basis, or each time a particular event or circumstance occurs, without ASIC having to give a further written notice.

Notice to licensee to obtain an audit report

(3) ASIC may also give a licensee a written notice directing the licensee to obtain an audit report, prepared by a suitably qualified person specified in the notice, on a statement, or on each statement in a class of statements, under subsection (1) before the statement is given to ASIC.

(4) A notice under subsection (3) is not a legislative instrument.

Notice must specify day by which licensee must comply

(5) A notice given under this section must specify the day by which the licensee must comply with the notice (which must be a reasonable period after the notice is given). ASIC may extend the day by giving a written notice to the licensee.

Requirement to comply with notice

(6) The licensee must comply with a notice given under this section within the time specified in the notice.

Civil penalty: 5,000 penalty units.

Offence

(7) A person commits an offence if:

(a) the person is subject to a requirement under subsection (6); and

(b) the person engages in conduct; and

Criminal penalty: 6 months imprisonment.

Strict liability offence

(8) A person commits an offence if:

(a) the person is subject to a requirement under subsection (6); and

(b) the person engages in conduct; and

Criminal penalty: 20 penalty units.

(9) Subsection (8) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

50 Obligation to give ASIC information required by the regulations

Regulations may require licensee to give information

(1) The regulations may require a licensee, or each licensee in a class of licensees, to give ASIC specified information about the credit activities engaged in by the licensee or its representatives.

Requirement to comply with regulations

(2) If regulations under subsection (1) require a licensee to give ASIC information, the licensee must give ASIC that information.

Civil penalty: 5,000 penalty units.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement to give ASIC information under subsection (2); and

(b) the person engages in conduct; and

Criminal penalty: 6 months imprisonment.

Strict liability offence

(4) A person commits an offence if:

(a) the person is subject to a requirement to give ASIC information under subsection (2); and

(b) the person engages in conduct; and

Criminal penalty: 20 penalty units.

(5) Subsection (4) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

50A What are reportable situations?

(1) There is a reportable situation in relation to a licensee if one of the following paragraphs is satisfied:

(a) the licensee or a representative of the licensee has breached a core obligation and the breach is significant;

(b) the licensee or a representative of the licensee is no longer able to comply with a core obligation and the breach, if it occurs, will be significant;

(c) the licensee or a representative of the licensee conducts an investigation into whether there is a reportable situation of the kind mentioned in paragraph (a) or (b) and the investigation continues for more than 30 days;

(d) an investigation described in paragraph (c) discloses that there is no reportable situation of the kind mentioned in paragraph (a) or (b).

(2) There is also a reportable situation in relation to a licensee if:

(a) in the course of engaging in a credit activity, the licensee or a representative of the licensee has engaged in conduct constituting gross negligence; or

(b) the licensee or a representative of the licensee has committed serious fraud; or

(3) Each of the following is a core obligation:

(a) an obligation under section 47, other than the obligation under paragraph 47(1)(d);

(b) the obligation under paragraph 47(1)(d), so far as it relates to this Act, the Transitional Act and Division 2 of Part 2 of the ASIC Act and regulations made for the purpose of that Division;

(i) covered by paragraph (d) of the definition of credit legislation in subsection 5(1); and

(ii) specified in regulations made for the purposes of this subparagraph;

(d) an obligation of a representative of the licensee under this Act, the Transitional Act, Division 2 of Part 2 of the ASIC Act or regulations made for the purpose of that Division.

(4) For the purposes of this section, a breach of a core obligation is taken to be significant if:

(a) the breach is constituted by the commission of an offence under any law and the commission of the offence is punishable on conviction by a penalty that may include imprisonment for a maximum period of:

(i) if the offence involves dishonesty—3 months or more; or

(ii) in any other case—12 months or more; or

(b) the breach is constituted by a contravention of a civil penalty provision under any law, other than a civil penalty provision prescribed by the regulations for the purposes of this paragraph; or

(c) the breach is constituted by a contravention of a key requirement (as defined for the purposes of the National Credit Code), other than a key requirement prescribed by the regulations for the purposes of this paragraph; or

(d) the breach is constituted by a contravention of subsection 12DA(1) of the ASIC Act (misleading or deceptive conduct in relation to a financial service); or

(e) the breach results, or is likely to result, in material loss or damage to a credit activity client of the licensee; or

(f) any other circumstances prescribed by the regulations for the purposes of this paragraph exist.

(5) Otherwise, for the purposes of this section, a breach of a core obligation is significant having regard to the following:

(a) the number or frequency of similar breaches;

(b) the impact of the breach on the licensee’s ability to engage in credit activities covered by the licence;

(c) the extent to which the breach indicates that the licensee’s arrangements to ensure compliance with those obligations are inadequate;

(d) any other matters prescribed by regulations made for the purposes of this paragraph.

(5A) Regulations for the purposes of paragraph (4)(b) may prescribe a civil penalty provision to the extent that it relates to the following:

(a) contraventions of specified provisions;

(b) specified matters.

(6) For the purposes of this section, a person is a credit activity client of a licensee if the person is a consumer who:

(a) is a party to a credit contract, or will be a party to a proposed credit contract, in relation to which the licensee, or a representative of the licensee, performs the obligations, or exercises the rights, of a credit provider; or

(b) is a person to whom the licensee, or a representative of the licensee, provides a credit service; or

(c) is a party to a consumer lease, or will be a party to a proposed consumer lease, in relation to which the licensee, or a representative of the licensee, performs the obligations, or exercises the rights, of a lessor; or

(d) is a mortgagor under a mortgage, or will be the mortgagor under a proposed mortgage, in relation to which the licensee, or a representative of the licensee, performs the obligations, or exercises the rights of a mortgagee; or

(e) is the guarantor under a guarantee, or will be the guarantor under a proposed guarantee, in relation to which the licensee, or a representative of the licensee, performs the obligations, or exercises the rights, of a beneficiary under the guarantee; or

(f) is a person in relation to whom the licensee, or a representative of the licensee, engages in a prescribed activity mentioned in item 6 of the table in subsection 6(1).

50B Obligation to lodge a report—reportable situations in relation to the licensee

Reporting a reportable situation to ASIC

(1) If there are reasonable grounds to believe that a reportable situation has arisen in relation to a licensee:

(a) the licensee must lodge a report in relation to the reportable situation with ASIC; and

(b) the report must be lodged in accordance with this section.

Civil penalty: 5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 2 years imprisonment.

Report must be in the approved form

(3) The report must be lodged with ASIC in writing in the approved form.

Period within which report must be lodged

(4) The report must be lodged with ASIC within 30 days after the licensee first knows that, or is reckless with respect to whether, there are reasonable grounds to believe that the reportable situation has arisen.

Strict liability applies in relation to paragraphs (1)(a) and (b)

(5) Strict liability applies in relation to paragraphs (1)(a) and (b).

If report is received by APRA

(6) A report that a licensee is required to lodge with ASIC under this section in relation to a reportable situation is taken to have been lodged with ASIC if:

(a) the licensee is a body regulated by APRA; and

(b) the licensee has given a report to APRA that contains all of the information that is required in a report under this section in relation to the reportable situation.

(7) Subsection (1) does not apply to a licensee in relation to a reportable situation if:

(a) the licensee is a body regulated by APRA; and

(b) the auditor or actuary of the licensee gives APRA a written report about a matter to which the reportable situation relates; and

(c) the report is given before, or within 10 business days after, the licensee first knows that, or is reckless with respect to whether, there are reasonable grounds to believe that the reportable situation has arisen.

50C Obligation to lodge a report—reportable situations in relation to other licensees

Reporting a reportable situation to ASIC

(1) A licensee (the reporting licensee) must lodge a report with ASIC in accordance with this section if there are reasonable grounds to believe that:

(a) a reportable situation has arisen in relation to another licensee of the kind mentioned in:

(i) paragraph 50A(1)(a) or (b) (significant breach or likely breach of a core obligation); or

(ii) subsection 50A(2) (gross negligence or serious fraud); and

(b) one of the following is an individual who has engaged in conduct that forms part of the reportable situation:

(i) the other licensee;

(ii) an employee of the other licensee or of a related body corporate of the other licensee, acting within the scope of the employee’s employment;

(iii) a director of the other licensee or of a related body corporate of the other licensee, acting within the scope of the director’s duties as director;

(iv) another representative of the other licensee acting within the scope of the representative’s authority given by the licensee; and

Civil penalty: 5,000 penalty units.

Report must be in the approved form

(2) The report must be lodged with ASIC in writing in the approved form.

Period within which report must be lodged

(3) The report must be lodged with ASIC within 30 days after the reporting licensee first knows of, or is reckless with respect to, the circumstances mentioned in paragraphs (1)(a), (b) and (c).

If the reportable situation already reported to ASIC

(4) Subsection (1) does not apply in relation to a reportable situation if there are reasonable grounds to believe that ASIC is aware of:

(a) the existence of the reportable situation; and

(b) all of the information that is required in a report under this section in relation to the reportable situation.

A copy of the report must be given to the other licensee

(5) The reporting licensee must give a copy of any report that the reporting licensee is required to lodge with ASIC under subsection (1) to the other licensee within 30 days after the reporting licensee first knows of, or is reckless with respect to, the circumstances mentioned in paragraphs (1)(a), (b) and (c).

Civil penalty: 5,000 penalty units.

(6) A licensee has qualified privilege in relation to a copy of a report given under subsection (5).

(7) A licensee who has qualified privilege under subsection (6) in respect of conduct is also not liable for any action based on breach of confidence in relation to that conduct.

50D ASIC must publish details of certain reports

(1) ASIC must, for each financial year, publish information about:

(a) reports lodged with ASIC during the financial year under section 50B in relation to reportable situations of the kind mentioned in paragraphs 50A(1)(a) and (b) (breaches and likely breaches of core obligations); and

(b) reports lodged with APRA during the financial year, as described in subsections 50B(6) and (7), in relation to reportable situations of the kind mentioned in paragraphs 50A(1)(a) and (b) (breaches and likely breaches of core obligations); and

(2) The information must:

(a) be published within 4 months after the end of the financial year; and

(b) be published on ASIC’s website; and

(c) include the information (if any) prescribed by the regulations, which may include personal information (within the meaning of the Privacy Act 1988) in relation to a licensee who is an individual; and

(d) if the regulations prescribe how the information is to be organised—be organised in accordance with the regulations.

(3) The regulations may prescribe circumstances in which information need not be included in the information published by ASIC under this section.

(4) ASIC may correct any error in, or omission from, information published under this section.

51 Obligation to provide ASIC with assistance if reasonably requested

Requirement to provide assistance

(1) If ASIC, or a person authorised by ASIC, reasonably requests assistance from a licensee in relation to whether the licensee and its representatives are complying with the credit legislation, the licensee must give ASIC or the authorised person the requested assistance.

Civil penalty: 5,000 penalty units.

(2) If the request is in writing, it is not a legislative instrument.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement to give ASIC or an authorised person assistance under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 6 months imprisonment.

Assistance may include showing ASIC credit books etc.

(4) The assistance referred to in subsection (1) may include showing ASIC the person’s credit books or giving ASIC other information.

Subdivision C—Notifying and remediating consumers affected by reportable situations

51A Reporting to consumers affected by a reportable situation

Notifying an affected consumer of a reportable situation

(1) A licensee must take reasonable steps to notify a consumer (the affected consumer) of a reportable situation in accordance with this section if:

(a) the licensee, or a representative of the licensee, provides or has provided credit assistance to the affected consumer in relation to a credit contract secured by a mortgage over residential property; and

(b) the licensee, or the representative of the licensee, is a mortgage broker; and

(c) there are reasonable grounds to believe that a reportable situation has arisen in relation to the licensee as mentioned in:

(i) paragraph 50A(1)(a) (significant breach of a core obligation); or

(ii) subsection 50A(2) (gross negligence or serious fraud); and

(d) there are reasonable grounds to suspect that:

(i) the affected consumer has suffered or will suffer loss or damage as a result of the reportable situation; and

(ii) the affected consumer has a legally enforceable right to recover the loss or damage from the licensee.

Civil penalty: 5,000 penalty units.

Form and period for giving notice

(2) A notice under this section must:

(a) be given in writing within 30 days after the licensee first knows of, or is reckless with respect to, the circumstances mentioned in paragraphs (1)(a), (b), (c) and (d); and

(b) if ASIC has approved the form in which the notice must be given:

(i) be in the approved form; and

(ii) include the information, statements, explanations or other matters required by the form; and

(iii) be accompanied by any other material required by the form.

Qualified privilege

(3) A licensee has qualified privilege in relation to a notice given under this section.

(4) A licensee who has qualified privilege under subsection (3) in respect of conduct is also not liable for any action based on breach of confidence in relation to that conduct.

51B Obligation to investigate reportable situations that may affect consumers

Obligation to investigate

(1) A licensee must conduct an investigation into a reportable situation in accordance with this section if:

(a) the licensee, or a representative of the licensee, has provided credit assistance to a consumer (the affected consumer) in relation to a credit contract secured by a mortgage over residential property; and

(b) the licensee, or the representative of the licensee, is a mortgage broker; and

(c) there are reasonable grounds to believe that a reportable situation has arisen in relation to the licensee as mentioned in:

(i) paragraph 50A(1)(a) (significant breach of a core obligation); or

(ii) subsection 50A(2) (gross negligence or serious fraud); and

(d) there are reasonable grounds to suspect that:

(i) the affected consumer has suffered or will suffer loss or damage as a result of the reportable situation; and

(ii) the affected consumer has a legally enforceable right to recover the loss or damage from the licensee.

Civil penalty: 5,000 penalty units.

Period within which investigation must be commenced

(2) The investigation must be commenced within 30 days after the licensee first knows of, or is reckless with respect to, the circumstances mentioned in paragraphs (1)(a), (b), (c) and (d).

Matters to be considered in the investigation

(3) In conducting the investigation, the licensee must:

(a) identify the conduct that gave rise to the reportable situation; and

(b) quantify the loss or damage that there are reasonable grounds to believe:

(i) the affected consumer has suffered or will suffer as a result of the reportable situation; and

(ii) the affected consumer has a legally enforceable right to recover from the licensee; and

Completing the investigation

(4) The investigation must be completed as soon as is reasonably practicable after it is commenced.

Notifying affected consumer

(5) The licensee must take reasonable steps to give the affected consumer a notice of the outcome of the investigation:

(a) in writing within 10 days after the investigation is completed; and

(b) if ASIC has approved the form in which the notice must be given:

(i) in the approved form; and

(ii) that includes the information, statements, explanations or other matters required by the form; and

(iii) that is accompanied by any other material required by the form.

Civil penalty: 5,000 penalty units.

(6) A licensee has qualified privilege in relation to a notice given under subsection (5).

(7) A licensee who has qualified privilege under subsection (6) in respect of conduct is also not liable for any action based on breach of confidence in relation to that conduct.

Compensating the affected consumer for loss or damage

(8) If, after the investigation is completed, there are reasonable grounds to believe that:

(a) the affected consumer has suffered or will suffer loss or damage as a result of the reportable situation; and

(b) the affected consumer has a legally enforceable right to recover the loss or damage from the licensee;

the licensee must take reasonable steps to pay the affected consumer an amount equal to the loss or damage within 30 days after the investigation is completed.

Civil penalty: 5,000 penalty units.

Nothing affects right of affected consumer to pursue legally enforceable rights

(9) Nothing in this section affects any legally enforceable right of the affected consumer to recover loss or damage that the affected consumer suffers, or will suffer, as a result of a reportable situation.

(10) However, a court may take into account the amount paid by the licensee under this section when quantifying the amount of compensation (if any) to be paid by the licensee in relation to that loss or damage.

51C Obligation to keep records of compliance

Obligation to keep records of compliance

(1) A licensee must keep records sufficient to enable the licensee’s compliance with this Subdivision to be readily ascertained.

(2) The regulations may specify records that the licensee must keep as part of the obligation in subsection (1).

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement in relation to records under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 5 years imprisonment.

Subdivision D—Miscellaneous

52 Obligation to cite Australian credit licence number

When this section applies

(1) This section applies on or after the day that is 2 years after the day section 3 commences.

Requirement to include licence number in documents

(2) Whenever a licensee identifies itself in a document of a kind prescribed by the regulations, the licensee must:

(a) include in the document the licensee’s Australian credit licence number; and

(b) identify in the document that the number is the licensee’s Australian credit licence number.

Civil penalty: 5,000 penalty units.

Strict liability offence

(3) A person commits an offence if:

(a) the person is subject to a requirement under subsection (2) to include and identify its Australian credit licence number in a document; and

(b) the person engages in conduct; and

Criminal penalty: 20 penalty units.

(4) Subsection (3) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

53 Obligation to lodge annual compliance certificate

Requirement to lodge annual compliance certificate

(1) A licensee must, no later than 45 days after the licensee’s licensing anniversary in each year, lodge a compliance certificate with ASIC in accordance with this section. ASIC may extend the day by giving a written notice to the licensee.

Civil penalty: 5,000 penalty units.

Compliance certificate must be in approved form

(2) The compliance certificate must be in the approved form.

Who must sign compliance certificate

(3) The compliance certificate must be signed by:

(a) if the licensee is a single natural person—the licensee; or

(b) if the licensee is a body corporate—a person of a kind prescribed by the regulations; or

(c) if the licensee is a partnership or the trustees of a trust—a partner or trustee who performs duties in relation to credit activities.

Requirement to ensure compliance certificate is lodged

(4) Each person by whom the compliance certificate may be signed under subsection (3) must ensure that the licensee lodges the compliance certificate with ASIC in accordance with this section.

Civil penalty: 5,000 penalty units.

Strict liability offence

(5) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1) or (4); and

(b) the person engages in conduct; and

Criminal penalty: 60 penalty units.

(6) Subsection (5) is an offence of strict liability.

Meaning of licensing anniversary

(7) Licensing anniversary of a licensee means the anniversary of the day on which the licensee’s licence came into force under section 42.

53A Obligation to notify ASIC of change in control

Requirement to notify ASIC of change in control

(1) If an entity (as defined by section 64A of the Corporations Act 2001) starts to control, or stops controlling, a licensee, the licensee must lodge a notification with ASIC:

(a) in the approved form; and

(b) before the end of 30 business days after the day the entity starts to control, or stops controlling, the licensee.

Strict liability offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1) to lodge a notification with ASIC; and

(b) the person engages in conduct; and

Criminal penalty: 30 penalty units.

(3) Subsection (2) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

53B Obligation to notify ASIC if licensee does not engage in credit activities

Requirement to notify ASIC if licensee does not engage in credit activities

(1) If a licensee does not engage in the credit activities authorised by the licence before the end of 6 months after the licence is granted, the licensee must lodge a notification with ASIC:

(a) in the approved form; and

(b) before the end of 15 business days after the end of the 6 months.

Strict liability offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1) to lodge a notification with ASIC; and

(b) the person engages in conduct; and

Criminal penalty: 30 penalty units.

(3) Subsection (2) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

53C Knowledge and recklessness

In this Division:

knowledge has the meaning given by section 5.3 of the Criminal Code.

recklessness has the meaning given by section 5.4 of the Criminal Code.

Division 6—When a licence can be suspended, cancelled or varied

Subdivision A—Suspensions and cancellations

54 Suspension or cancellation without hearing

(1) ASIC may suspend or cancel a licensee’s licence if:

(a) the licensee lodges with ASIC an application for the suspension or cancellation; or

(b) the licensee ceases to engage in credit activities; or

(i) the licensee;

(ii) if the licensee is a body corporate—a director, secretary or senior manager of the body corporate;

(iii) if the licensee is a partnership or the trustees of a trust—a partner or trustee; or

(d) in the case of a licensee that is a leviable entity (within the meaning of the ASIC Supervisory Cost Recovery Levy Act 2017)—the following have not been paid in full at least 12 months after the due date for payment:

(i) an amount of levy (if any) payable in respect of the licensee;

(ii) an amount of late payment penalty payable (if any) in relation to the levy;

(iii) an amount of shortfall penalty payable (if any) in relation to the levy; or

(e) in the case of a licensee that is liable to pay an instalment of levy (within the meaning of the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2023)—the following have not been paid in full at least 12 months after the due date for payment:

(i) the amount of the instalment of levy;

(ii) the amount of any late payment penalty in relation to the instalment of levy;

(iii) the amount of any shortfall penalty payable in relation to the instalment of levy.

(1A) ASIC may cancel a licensee’s licence if the licensee does not engage in the credit activities authorised by the licence before the end of 6 months after the licence is granted.

(1B) ASIC must cancel a licensee’s licence if:

(a) the licensee is required to pay an amount to a person in accordance with a relevant AFCA determination (within the meaning of the Corporations Act 2001); and

(b) the CSLR operator (within the meaning of that Act) has paid, under section 1063 of that Act, an amount of compensation to the person for the relevant AFCA determination.

(2) For the purposes of paragraph (1)(c), the matters are as follows:

(a) if the person is not the trustees of a trust—the person is insolvent;

(b) if the person is a natural person:

(i) the person is convicted of serious fraud; or

(ii) the person is incapable of managing his or her affairs because of physical or mental incapacity; or

(iii) a prescribed State or Territory order is in force against the person.

(3) An application for suspension or cancellation of a licence must be in the approved form.

55 Suspension or cancellation after offering a hearing

(1) ASIC may suspend or cancel a licensee’s licence (subject to complying with subsection (4)) if:

(a) the licensee has contravened an obligation under section 47 (which deals with general conduct obligations of licensees); or

(b) ASIC has reason to believe that the licensee is likely to contravene an obligation under that section; or

(c) the requirement in section 37A (fit and proper person test) is not satisfied in relation to the licensee and the licence; or

(d) the application for the licence:

(i) was false in a material particular or materially misleading; or

(ii) omitted a material matter; or

(e) any information, audit report or statement lodged with ASIC in accordance with a request under subsection 37(4) in relation to the application for the licence:

(i) was false in a material particular or materially misleading; or

(ii) omitted a material matter; or

(f) an application made by the licensee under paragraph 45(2)(b) in relation to the licence:

(i) was false in a material particular or materially misleading; or

(ii) omitted a material matter; or

(g) any information, audit report or statement lodged with ASIC in accordance with a request under subsection 46A(3) in relation to an application made by the licensee under paragraph 45(2)(b) in relation to the licence:

(i) was false in a material particular or materially misleading; or

(ii) omitted a material matter.

(4) ASIC may only suspend or cancel a licensee’s licence under this section after giving the licensee an opportunity:

(a) to appear, or be represented, at a hearing before ASIC that takes place in private; and

(b) to make submissions to ASIC on the matter.

56 Suspension and cancellation—special procedures for APRA‑regulated bodies

Special procedures for APRA‑regulated bodies (other than ADIs)

(1) If a licensee, or a related body corporate, is a body (the APRA body) regulated by APRA (other than an ADI), then the following provisions apply:

(a) ASIC cannot suspend or cancel the licensee’s licence if doing so would, in ASIC’s opinion, have the result of preventing the APRA body from being able to carry on all or any of its usual activities (being activities in relation to which APRA has regulatory or supervisory responsibilities), unless ASIC has first consulted APRA about the proposed action;

(b) if ASIC suspends or cancels the licensee’s licence and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken.

Special procedures for ADIs

(2) If:

(a) a licensee is an ADI; or

(b) a related body corporate of a licensee is an ADI, and cancellation or suspension of the licensee’s licence would, in ASIC’s opinion, have the result of preventing the ADI from being able to carry on all or any of its banking business (within the meaning of the Banking Act 1959);

then the following provisions have effect:

(c) subject to paragraph (d), the powers that ASIC would otherwise have under this Division to cancel or suspend the licensee’s licence, or to revoke a suspension to which this subsection applied, are instead powers of the Minister;

(d) the procedures for the exercise of a power to which paragraph (c) applies are the same as would apply if ASIC could exercise the power, except that the Minister must not exercise the power unless he or she has first considered advice from ASIC on the proposed action, being advice given after ASIC has consulted APRA about the proposed action;

(e) ASIC (rather than the Minister) must still conduct any hearing required under paragraph 55(4)(a) and receive any submissions under paragraph 55(4)(b).

Subdivision B—Variations

57 Varying licences

ASIC may vary a person’s licence to take account of a change in the person’s name.

Note: The conditions on the licence can be varied under section 45.

Subdivision C—Miscellaneous rules about suspensions, cancellations and variations

58 Effect of suspension

(1) A suspended licence has no effect while it remains suspended.

(2) Subsection (1) has effect subject to section 62 (which deals with the continued effect of some suspended or cancelled licences).

59 Revocation of suspension

ASIC may at any time revoke the suspension of a licence.

60 Date of effect, notice and publication of variation, cancellation or suspension etc.

(1) ASIC must give a licensee written notice of a variation, suspension, revocation of a suspension, or cancellation of the licensee’s licence.

(2) A variation, suspension, revocation of a suspension, or cancellation of a licence comes into force when the written notice of that action is given to the licensee.

(3) As soon as practicable after the notice is given to the licensee, ASIC must publish a notice of the action on ASIC’s website. The notice must state when the action took effect.

61 Statement of reasons

A notice of suspension or cancellation given to a licensee must be accompanied by a statement of reasons for the action taken.

62 ASIC may allow licence to continue in force

(1) If ASIC gives a written notice of suspension or cancellation to a licensee, ASIC may include terms in the notice specifying that the licence continues in force as though the suspension or cancellation had not happened for the purposes of specified provisions of this Act in relation to specified matters, a specified period, or both.

(2) If ASIC includes terms in a notice under subsection (1), the licence continues in force in accordance with the terms of the notice.

Part 2‑3—Credit representatives and other representatives of licensees

Division 1—Introduction

63 Guide to this Part

This Part is about credit representatives of licensees (which are a particular type of representative of licensees). A person who is authorised as a credit representative of a licensee does not need to hold an Australian credit licence when engaging in credit activities on behalf of the licensee.

This Part also deals with information that ASIC may give to licensees about their representatives (such as their employees, directors and credit representatives, and persons who act on their behalf), and the liability of licensees for their representatives.

Division 2 deals with how a credit representative may be authorised to engage in credit activities on behalf of a licensee. It also deals with certain obligations of licensees in relation to the authorisation of their credit representatives.

Division 3 deals with information about representatives that ASIC may give to a licensee and the use of that information.

Division 4 deals with the liability of licensees for the conduct of their representatives.

Division 2—Authorisation of credit representatives

64 Licensee may authorise credit representatives

Authorisation of credit representative by licensee

(1) A licensee may give a person a written notice authorising the person to engage in specified credit activities on behalf of the licensee.

(2) A person who is authorised under subsection (1) is a credit representative of the relevant licensee.

(3) The credit activities specified may be some or all of the credit activities authorised by the licensee’s licence.

When authorisation is of no effect

(4) The authorisation:

(a) is of no effect if subsection (5) applies to it when it is given; and

(b) ceases to have effect if and when subsection (5) starts to apply to it after it is given;

to the extent that subsection (5) applies.

(5) This section applies to the authorisation to the extent that it purports to authorise:

(a) a person to engage in a credit activity that is not authorised by the licensee’s licence; or

(b) a person to engage in a credit activity, and a banning order or disqualification order under Part 2‑4 is in force against the person in relation to the credit activity; or

(d) a person who is banned from engaging in a credit activity under a law of a State or Territory; or

(e) a natural person who has been convicted, within the last 10 years, of serious fraud; or

(f) a natural person against whom a prescribed State or Territory order is in force; or

(g) a person that is a body corporate, if a prescribed State or Territory order is in force against a director, secretary or senior manager of the body corporate who would perform duties in relation to the credit activities specified in the authorisation; or

(h) a person that is a partnership or the trustees of a trust, if a prescribed State or Territory order is in force against a partner or trustee who would perform duties in relation to the credit activities specified in the authorisation.

65 Credit representative that is a body corporate may sub‑authorise natural persons as credit representatives

Authorisation of natural person as credit representative by credit representative that is a body corporate

(1) A body corporate that is a credit representative of a licensee may, in that capacity, give a natural person a written notice authorising that natural person to engage in specified credit activities on behalf of the licensee.

(2) A natural person who is authorised under subsection (1) is a credit representative of the relevant licensee.

(3) The credit activities specified may be some or all of the credit activities authorised by the licensee’s licence.

Licensee must give consent to authorisation

(4) The authorisation can only be given if the licensee gives the body corporate its written consent to the authorisation. The licensee may give consent in relation to either a specified natural person or a specified class of natural persons (the membership of which might change from time to time).

When authorisation is of no effect

(5) The authorisation:

(a) is of no effect if subsection (6) applies to it when it is given; and

(b) ceases to have effect if and when subsection (6) starts to apply to it after it is given;

to the extent that subsection (6) applies.

(6) This subsection applies to the authorisation to the extent that it purports to authorise:

(a) a natural person to engage in a credit activity that is not authorised by the licensee’s licence; or

(b) a natural person to engage in a credit activity, and a banning order or disqualification order under Part 2‑4 is in force against the natural person in relation to the credit activity; or

(d) a natural person who is banned from engaging in a credit activity under a law of a State or Territory; or

(e) a natural person who has been convicted, within the last 10 years, of serious fraud; or

(f) a natural person against whom a prescribed State or Territory order is in force; or

(g) a natural person in relation to the authorisation of whom the licensee has not given its written consent in accordance with subsection (4).

(7) To avoid doubt, an authorisation under subsection (1) is taken, for the purposes of sections 66 to 72, to be given by the body corporate, not the licensee.

66 Credit representative of 2 or more licensees

(1) One person can be the credit representative of 2 or more licensees, but only if:

(a) each of those licensees has consented to the person also being the credit representative of each of the other licensees; or

(b) each of the licensees is a related body corporate of each of the other licensees.

(2) An authorisation:

(a) is of no effect if it contravenes subsection (1) when it is given; and

(b) ceases to have effect if and when it starts to contravene subsection (1) after it is given.

67 A person cannot be a credit representative in relation to credit activities authorised by a person’s licence

(1) A person must not authorise another person to engage in a credit activity as a credit representative under subsection 64(1) or 65(1) if the other person holds a licence authorising the person to engage in the credit activity.

(2) An authorisation:

(a) is of no effect if it contravenes subsection (1) when it is given; and

(b) ceases to have effect if and when it starts to contravene subsection (1) after it is given.

68 Variation and revocation of authorisations and sub‑authorisations

Variation and revocation of authorisations

(1) An authorisation under subsection 64(1) may be varied or revoked at any time by the licensee giving written notice to the credit representative.

Variation and revocation of sub‑authorisations

(2) An authorisation under subsection 65(1) may be varied or revoked at any time by:

(a) the licensee in relation to whom the authorisation was given; or

(b) the body corporate that gave the authorisation;

giving written notice to the credit representative.

(3) If a person varies or revokes an authorisation under subsection (2), that person must give the other person who could have varied or revoked the authorisation written notice of the variation or revocation.

69 Obligation not to give authorisation that has no effect

Requirement not to give authorisation

(1) A person must not purport to authorise a credit representative under subsection 64(1) or 65(1) if, at the time the person first purports to give the authorisation, it is of no effect, to any extent, under this Division.

Civil penalty: 5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 2 years imprisonment.

70 Obligation to vary or revoke authorisation that ceases to have effect

Requirement to vary or revoke authorisation

(1) If a person:

(a) has authorised a credit representative under subsection 64(1) or 65(1); and

(b) becomes aware of a matter because of which the authorisation of the credit representative has ceased to have effect under this Division;

the person must, as soon as practicable:

(d) vary the authorisation so that it is no longer, to any extent, of no effect under this Division.

Civil penalty: 5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is required to vary or revoke an authorisation under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 2 years imprisonment.

71 Obligation to notify ASIC etc. about credit representatives

Requirement to notify ASIC when credit representative authorised

(1) If a person authorises a credit representative under subsection 64(1) or 65(1), the person must, within 15 business days of the authorisation, lodge with ASIC a written notice in accordance with subsection (3).

Civil penalty: 5,000 penalty units.

Requirement to notify licensee of sub‑authorisation

(2) If:

(a) a person authorises a natural person as a credit representative of a licensee under subsection 65(1) (which deals with sub‑authorisations); and

(b) the consent of the licensee to the authorisation was given in relation to a specified class of natural persons;

then the person must, within 15 business days of the authorisation, give the licensee written notice of the authorisation in accordance with subsection (3).

Civil penalty: 5,000 penalty units.

Details to be included in notice

(3) The notice must include the following details:

(a) the name and business address of the credit representative;

(b) details of the authorisation, including the date on which it was made and what the credit representative is authorised to do on behalf of the licensee;

(d) details of each other licensee on behalf of whom the credit representative is a credit representative.

Requirement to notify ASIC of change in details etc.

(4) If:

(a) a person authorises a credit representative under subsection 64(1) or 65(1); and

(b) either:

(i) any of the details that are referred to in subsection (3) in relation to the credit representative changes; or

(ii) the person revokes the authorisation;

then the person must, within 10 business days of the change or revocation, lodge with ASIC a written notice of the change or revocation.

Civil penalty: 5,000 penalty units.

(5) A notice given under subsection (1), (2) or (4) must be in the approved form.

Strict liability offence

(6) A person commits an offence if:

(a) the person is subject to a requirement to give a notice under subsection (1), (2) or (4); and

(b) the person engages in conduct; and

Criminal penalty: 60 penalty units.

(7) Subsection (6) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

72 Credit representative numbers

(1) Within a reasonable period after receiving a notice under subsection 71(1) of the authorisation of a credit representative, ASIC must allocate the credit representative a unique credit representative number.

(2) ASIC must give written notice of the credit representative number to:

(a) the credit representative; and

(b) the person who authorised the credit representative.

(3) This section does not apply in relation to a credit representative that has already been allocated a credit representative number.

Division 3—Information about representatives

73 ASIC may give licensee information about representatives

ASIC may give licensee information about representatives

(1) If ASIC considers it appropriate to do so, it may give information to a licensee about a person whom ASIC believes is, or will be, a representative of the licensee. However, ASIC may only do so if it believes, on reasonable grounds, that the information is true.

Requirements about use of information

(2) A licensee to whom information is given under subsection (1) may make use of, make a record of, or give to another person, the information for a purpose connected with:

(a) the licensee making a decision about what action (if any) to take in relation to the representative, as a consequence of receiving the information; or

(b) the licensee taking action pursuant to such a decision.

(3) A licensee to whom information is given under subsection (1) must not make use of, make a record of, or give to another person, the information other than as permitted by subsection (2).

Civil penalty: 5,000 penalty units.

(4) A person to whom information has been given for a purpose or purposes under subsection (2) or this subsection may make use of, make a record of, or give to another person, that information for that purpose or any of those purposes.

(5) A person to whom information has been given for a purpose or purposes under subsection (2) or (4) must not make use of, make a record of, or give to another person, the information other than as permitted by subsection (4).

Civil penalty: 5,000 penalty units.

Offence

(6) A person commits an offence if:

(a) the person is subject to a requirement under subsection (3) or (5); and

(b) the person engages in conduct; and

Criminal penalty: 1 year imprisonment.

Qualified privilege

(7) A person has qualified privilege in relation to an act done by the person under subsection (2) or (4).

Use of information obtained under this section in court

(8) A person to whom information is given in accordance with this section must not give any of the information to a court, or produce in a court a document that sets out some or all of the information, except:

(a) for a purpose connected with:

(i) a licensee making a decision about what action (if any) to take in relation to the representative, as a consequence of receiving some or all of the information; or

(ii) a licensee taking action pursuant to that decision; or

(iii) proving in proceedings in that court that particular action taken by a licensee in relation to the representative was taken pursuant to that decision; or

(b) in proceedings in that court, in so far as the proceedings relate to an alleged contravention of this section; or

(c) in proceedings about giving to a court false information some, at least, of which was the information given under this section.

(9) For the purposes of subsection (8), a licensee takes action in relation to a representative if the licensee:

(a) takes action by way of making, terminating or varying the terms and conditions of an agreement; or

(b) otherwise takes action in relation to an agreement;

to the extent that the agreement relates to the representative acting on behalf of the licensee.

(10) Subsection (8) also has the effect it would have if:

(a) a reference in it to a court were a reference to a court of a country outside Australia; and

(b) paragraph (8)(b) were omitted.

Division 4—Liability of licensees for representatives

74 Application of this Division

This Division applies to any conduct of a representative of a licensee:

(a) that relates to a credit activity; and

(b) on which a third person (the client) could reasonably be expected to rely; and

75 Responsibility if representative of only one licensee

If the representative is the representative of only one licensee, the licensee is responsible, as between the licensee and the client, for the conduct of the representative, whether or not the representative’s conduct is within the authority of the licensee.

76 Representatives of multiple licensees

When this section applies

(1) This section applies if the representative is the representative of more than one licensee.

Conduct covered by only one authority

(2) If:

(a) the representative is the representative of one of the licensees only in relation to a particular class of credit activity; and

(b) the conduct relates to that class of credit activity;

that licensee is responsible for the conduct, as between that licensee and the client, whether or not the conduct is within the authority of the licensee.

Conduct covered by multiple authorities

(3) If:

(a) the representative is the representative of more than one of the licensees in relation to a particular class of credit activity; and

(b) the conduct relates to that class of credit activity; and

(i) only one of those licensees (the authorising licensee); or

(ii) 2 or more of those licensees (the authorising licensees);

then:

(d) if subparagraph (c)(i) applies—the authorising licensee is responsible for the conduct, as between that licensee and the client; or

(e) if subparagraph (c)(ii) applies—the authorising licensees are jointly and severally responsible for the conduct, as between themselves and the client.

All other cases

(4) In any other case, all of the licensees are jointly and severally responsible for the conduct, as between themselves and the client, whether or not the representative’s conduct is within the authority of any of them.

77 Responsibility extends to loss or damage suffered by client

The responsibility of a licensee under this Division extends so as to make the licensee liable to the client in relation to any loss or damage suffered by the client as a result of the representative’s conduct.

78 Effect of this Division

(1) If a licensee is responsible for the conduct of its representative under this Division, the client has the same remedies against the licensee that the client has against the representative.

(2) The licensee and the representative (along with any other licensees that are also responsible) are all jointly and severally liable to the client in relation to those remedies.

(3) However, nothing in this Division imposes:

(a) any criminal responsibility; or

(b) any civil liability under a provision of this Act apart from this Division;

on a licensee that would not otherwise be imposed on the licensee.

(4) This Division does not relieve a representative of a licensee of any liability that the representative has to the client or the licensee.

(5) An agreement has no effect in so far as it purports to alter or restrict the operation of section 75, 76 or 77.

(6) However, subsection (5) does not apply to the extent that the agreement:

(a) provides for a representative of a licensee to indemnify the licensee for a liability of the licensee in relation to the representative; or

(b) provides for a licensee, for whom a representative acts, to indemnify another licensee for a liability in relation to the representative.

(7) A licensee must not make, or offer to make, an agreement that has, or would have, no effect under subsection (5).

Part 2‑4—Banning or disqualification of persons from engaging in credit activities

Division 1—Introduction

79 Guide to this Part

This Part is about banning or disqualifying persons from:

(a) engaging in credit activities; or

(b) controlling others who engage in credit activities; or

The bans are orders made by ASIC under Division 2.

The disqualifications are orders made by the court under Division 3.

Division 2—Banning orders

80 ASIC’s power to make a banning order

Making a banning order

(1) ASIC may, in writing, make one or more orders (banning orders) against a person:

(a) if ASIC suspends or cancels a licence of the person; or

(b) if the person becomes insolvent; or

(d) if the person has:

(i) contravened any credit legislation; or

(ii) been involved in a contravention of a provision of any credit legislation by another person; or

(e) if ASIC has reason to believe that the person is likely to:

(i) contravene any credit legislation; or

(ii) be involved in a contravention of a provision of any credit legislation by another person; or

(f) if ASIC has reason to believe that the person is not a fit and proper person to:

(i) engage in one or more credit activities; or

(ii) perform one or more functions as an officer (within the meaning of the Corporations Act 2001) of another person who engages in credit activities; or

(iii) control another person who engages in credit activities; or

(fa) if ASIC has reason to believe that the person is not adequately trained, or is not competent, to:

(i) engage in one or more credit activities; or

(ii) perform one or more functions as an officer (within the meaning of the Corporations Act 2001) of another person who engages in credit activities; or

(iii) control another person who engages in credit activities; or

(fb) if the person has, at least twice, been linked to a refusal or failure to give effect to a determination made by AFCA (within the meaning of the Corporations Act 2001) relating to a complaint that relates to:

(i) credit activities; or

(ii) a financial services business (within the meaning of the Corporations Act 2001); or

(fba) if all of the following apply:

(i) an individual who holds a licence, a partner in a partnership, a body corporate or a trustee of a trust is required to pay an amount in accordance with a relevant AFCA determination (within the meaning of the Corporations Act 2001);

(ii) the CSLR operator (within the meaning of that Act) has paid, under section 1063 of that Act, an amount of compensation for the relevant AFCA determination;

(iii) at the time the payment is made by the CSLR operator, the person is the individual licensee, a partner in the partnership, an officer (within the meaning of that Act) of the body corporate or the trustee of the trust; or

(fc) if subsection (3) applies to the person in relation to 2 or more corporations; or

(g) if a prescribed State or Territory order is in force against the person; or

(h) in any other circumstances prescribed by the regulations.

(1A) Subsection (1) has effect subject to subsection (4).

When a person is not a fit and proper person

(2) For the purposes of paragraph (1)(f), ASIC must have regard to the matters in section 37B.

When a person has been an officer of a corporation unable to pay its debts

(3) This subsection applies to a person in relation to a corporation if, within the last 7 years:

(a) the person was an officer (within the meaning of the Corporations Act 2001) of the corporation when the corporation was:

(i) engaging in credit activities; or

(ii) carrying on a financial services business (within the meaning of the Corporations Act 2001); and

(b) the corporation was wound up either:

(i) while the person was such an officer of the corporation; or

(ii) within the 12 months after the person ceased to be such an officer of the corporation; and

(c) a liquidator lodged a report under subsection 533(1) of the Corporations Act 2001 (including that subsection as applied by section 526‑35 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006) about the corporation’s inability to pay its debts.

Person to be given an opportunity to be heard

(4) Subject to subsection (5), if ASIC has not delegated its power to make a banning order against a person to a Financial Services and Credit Panel, ASIC may make the order only after giving the person an opportunity:

(a) to appear, or be represented, at a hearing before ASIC that takes place in private; and

(b) to make submissions to ASIC on the matter.

Note: If ASIC delegates its power to make a banning order against a person to a Financial Services and Credit Panel, the panel may make the order only after holding a hearing in relation to the proposed order (see section 157 of the ASIC Act).

(5) ASIC may make a banning order against a person without giving the person the opportunities mentioned in subsection (4) if:

(a) either:

(i) ASIC has not delegated its power to make the banning order to a Financial Services and Credit Panel; or

(ii) ASIC exercises its power to make the banning order despite such a delegation; and

(b) subsection (6) or (6A) applies.

Note: See section 34AB of the Acts Interpretation Act 1901 (effect of delegation).

(6) This subsection applies if:

(a) ASIC’s grounds for making a banning order against a person include that ASIC has suspended or cancelled a licence of the person (see paragraph (1)(a)); and

(b) the suspension or cancellation took place without a hearing under section 54.

(6A) This subsection applies if:

(a) ASIC’s grounds for making a banning order against a person include that the person has been convicted of fraud (see paragraph (1)(c)); and

(b) the person has been convicted of serious fraud.

Copy of banning order to be given to the person

(7) ASIC must give a copy of a banning order to the person against whom it was made.

81 What a banning order prohibits

(1) A banning order made against a person may specify that the person is prohibited from doing one or more of the following:

(a) engaging in any credit activities;

(b) engaging in specified credit activities in specified circumstances or capacities;

(c) controlling, whether alone or in concert with one or more other entities (as defined by section 64A of the Corporations Act 2001), another person who engages in credit activities;

(d) performing any function involved in the engaging in of credit activities (including as an officer (within the meaning of the Corporations Act 2001), manager, employee, contractor or in some other capacity);

(e) performing specified functions involved in the engaging in of credit activities.

(2) The banning order may specify that a particular prohibition specified in the order applies against the person:

(a) if the sole ground for the banning order is because paragraph 80(1)(fc) applies—for a specified period of up to 5 years; or

(b) otherwise—either permanently or for a specified period.

Note: This subsection applies separately to each prohibition specified in the order.

(3) A banning order may include a provision allowing the person against whom it was made, subject to any specified conditions:

(a) to do specified acts; or

(b) to do specified acts in specified circumstances;

that the order would otherwise prohibit them from doing.

(4) A banning order is not a legislative instrument.

82 Effect of banning orders

Requirement not to engage in conduct contrary to banning order

(1) A person must not engage in conduct that is contrary to a banning order that is in force against the person.

Civil penalty: 5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 5 years imprisonment.

Note: A person against whom a banning order is in force cannot be granted a licence authorising the person to engage in a credit activity to which the banning order applies (see subsection 40(1)).

83 Variation or cancellation of banning orders

(1) ASIC may vary or cancel a banning order if ASIC is satisfied that it is appropriate to do so because of a change in any of the circumstances based on which ASIC made the order.

(2) ASIC may do so:

(a) on its own initiative; or

(b) if the person against whom the order was made lodges with ASIC an application for the variation or cancellation.

(3) The application must be in the approved form.

(4) If ASIC proposes not to vary or cancel a banning order in accordance with an application given by a person under paragraph (2)(b), ASIC must give the person an opportunity:

(a) to appear, or be represented, at a hearing before ASIC that takes place in private; and

(b) to make submissions to ASIC on the matter.

(5) ASIC must give written notice of the variation or cancellation of a banning order to the person against whom the order was made.

84 Date of effect, notice and publication of banning order, variation or cancellation

(1) A banning order comes into force when it is given to the person against whom it is made.

(2) A variation or cancellation of a banning order comes into force when written notice of the variation or cancellation is given to the person against whom the order was made.

(3) ASIC must publish a notice on ASIC’s website as soon as practicable after making, varying or cancelling a banning order. The notice must state when the banning order, or variation or cancellation of the banning order, came into force and:

(a) in the case of the making of a banning order—set out a copy of the banning order; or

(b) in the case of the variation of a banning order—set out a copy of the banning order as varied.

(4) However, if the banning order contains a provision of the kind referred to in subsection 81(3) and ASIC considers that the notice on its website would be unreasonably long if that provision were included, the notice may instead set out a summary of the provision’s effect.

85 Statement of reasons

(1) A copy of a banning order given to a person must be accompanied by a statement of reasons for the order.

(2) If ASIC varies a banning order made against a person, ASIC must, on request by the person, give the person a statement of reasons for the variation.

Division 3—Disqualification by the court

86 Disqualification by the court

(1) ASIC may apply to the court for one or more orders under subsection (2) in relation to a person if ASIC:

(a) cancels a licence of the person; or

(b) makes a banning order against the person that is to operate permanently.

(2) The court may make:

(a) one or more orders disqualifying the person, permanently or for a specified period, from doing one or more of the following:

(i) engaging in any credit activities;

(ii) engaging in specified credit activities in specified circumstances or capacities;

(iii) controlling, whether alone or in concert with one or more other entities (as defined by section 64A of the Corporations Act 2001), another person who engages in credit activities;

(iv) performing any function involved in the engaging in of credit activities (including as an officer (within the meaning of the Corporations Act 2001), manager, employee, contractor or in some other capacity);

(v) performing specified functions involved in the engaging in of credit activities; or

(b) any other order the court considers appropriate.

Note: A person against whom a disqualification order is in force cannot be granted a licence authorising the person to engage in a credit activity to which the disqualification order applies (see subsection 40(1)).

Part 2‑5—Financial records, trust accounts and audit reports

Division 1—Introduction

87 Guide to this Part

This Part is about financial records, trust accounts and matters relating to audit reports required under this Act.

Division 2 deals with the requirement for licensees to keep certain financial records, and provides for how those records must be kept.

Division 3 deals with trust accounts. Licensees that provide credit services and that receive money on behalf of others in the course of those services are required to maintain a trust account. Those licensees must also comply with requirements in relation to trust account money, trust account statements and trust account audit reports.

Division 4 has requirements relating to audit reports required by this Act, and the auditors that prepare those reports.

Division 2—Financial records of licensees

88 Obligation to keep financial records

Requirement to keep financial records

(1) A licensee must:

(a) keep financial records that correctly record and explain the transactions and financial position of any business of engaging in credit activities carried on by the licensee; and

(b) keep those records in accordance with this Division; and

(d) comply with section 91 in relation to the location and production of records and particulars.

Civil penalty: 5,000 penalty units.

Meaning of financial records

(2) Financial records includes:

(a) invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes and vouchers; and

(b) documents of prime entry; and

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement in relation to financial records under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 5 years imprisonment.

Financial records may be kept with other records

(4) A licensee does not contravene this Division merely because some or all of the financial records are prepared as a part of, or in conjunction with, the records relating to any other business that is carried on by the licensee.

Note: For the purposes of subsection (3), a defendant bears an evidential burden in relation to the matter in subsection (4) (see subsection 13.3(3) of the Criminal Code).

89 How financial records are to be kept

The financial records must be kept in a way that:

(a) enables true and fair profit and loss statements, and balance sheets, of the business referred to in paragraph 88(1)(a) to be prepared from time to time; and

(b) allows those statements and balance sheets to be conveniently and properly audited in accordance with the auditing standards (if any) prescribed by regulations made under section 106.

90 Language of financial records

(1) The financial records must be kept in writing in the English language, or in a manner that enables them to be readily accessible and readily converted into writing in the English language.

(2) If any of the financial records are not kept in writing in the English language, the licensee must, if required to convert the financial records concerned into writing in the English language by a person who is entitled to examine the financial records concerned, comply with the requirement within a reasonable time.

91 Location of financial records

If any of the financial records are kept outside this jurisdiction, the licensee must:

(a) cause to be sent to and retained at a place in this jurisdiction such particulars in relation to the business dealt with in those financial records as will enable true and fair profit and loss statements and balance sheets to be prepared; and

(b) if required by ASIC to produce those financial records at a place in this jurisdiction, comply with the requirement not later than 28 days after the requirement is made.

92 Information to be shown in financial records

The financial records must be kept in sufficient detail to show particulars of:

(a) all money received or paid by the licensee; and

(b) for each credit contract under which the licensee is the credit provider:

(i) the amount and day of all payments made by or on behalf of the debtor under the credit contract; and

(ii) all amounts (including principal, interest, fees and charges) owed by the debtor under the credit contract; and

(c) for each consumer lease under which the licensee is the lessor—the amount and day of all payments made by or on behalf of the lessee under the consumer lease; and

(d) for each guarantee under which the licensee is the beneficiary of the guarantee—the amount and day of all payments made by or on behalf of the guarantor under the guarantee; and

(e) all income received by the licensee from indirect remuneration, interest, and other sources, and all expenses, indirect remuneration, and interest paid by the licensee; and

(f) all the assets and liabilities (including contingent liabilities) of the licensee; and

(g) any other matters prescribed by the regulations.

93 Regulations may impose additional requirements

The regulations may impose additional requirements to be complied with in relation to the financial records including, for example:

(a) requirements for things to be contained in the records; and

(b) requirements relating to the level of detail to be shown in the records.

94 Financial records taken to be made with licensee’s authority

An entry in the records is, unless the contrary is proved, to be taken to have been made by, or with the authority of, the licensee.

95 Obligation to retain financial records for 7 years

Requirement to retain financial records

(1) A licensee that is required by this Division to make a financial record must retain it for 7 years after the transactions covered by the record are completed.

Civil penalty: 5,000 penalty units.

Regulations

(2) The regulations may prescribe financial records to which subsection (1) does not apply.

Records to be kept even if person stops carrying on business

(3) Financial records must be retained in accordance with this section, even if the person stops carrying on any business to which they relate.

Offence

(4) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 6 months imprisonment.

96 Financial records are prima facie evidence of matters

(1) In proceedings in a court, a financial record kept under this Division is admissible as prima facie evidence of any matter in the financial record.

(2) A document purporting to be a financial record kept by a licensee under this Division is, unless the contrary is proved, presumed to be a financial record kept by the licensee under this Division.

(3) If:

(a) because of subsection (1) a financial record is prima facie evidence of a matter; and

(b) the financial record, or a part of the financial, is kept or prepared by recording or storing matters (including that matter) by means of a mechanical, electronic or other device;

a written reproduction of that matter as so recorded or stored is admissible as prima facie evidence of that matter in a proceeding in a court.

(4) A written document that purports to reproduce a matter recorded or stored by means of a mechanical, electronic or other device is, unless the contrary is proved, presumed to be a reproduction of that matter.

Division 3—Trust accounts of credit service licensees

97 Application of this Division

This Division applies to a licensee (the credit service licensee) that:

(a) holds a licence that authorises the licensee to provide a credit service; and

(b) in the course of providing the credit service, receives money on behalf of another person.

98 Obligation for credit service licensees to maintain trust account

Requirement to maintain trust account

(1) The credit service licensee must maintain one more trust accounts (the trust account) in accordance with this section.

Civil penalty: 5,000 penalty units.

Requirements for trust accounts

(2) The trust account must be maintained with an Australian ADI (within the meaning of section 9 of the Corporations Act 2001).

(3) The trust account must be designated as the credit service licensee’s trust account.

Offence

(4) The credit service licensee commits an offence if:

(a) the credit service licensee is subject to a requirement under subsection (1); and

(b) the credit service licensee engages in conduct; and

Criminal penalty: 6 months imprisonment.

99 Obligations in relation to trust account money

Requirement to pay money to credit of trust account

(1) The credit service licensee must pay to the credit of the trust account any money received by the credit service licensee on behalf of another person in relation to the credit service provided by the licensee.

Civil penalty: 5,000 penalty units.

Requirement in relation to withdrawal of money from trust account

(2) The credit service licensee must not withdraw any money paid into the trust account, other than for the purpose of paying the money in accordance with subsection (3).

Civil penalty: 5,000 penalty units.

Requirement in relation to payment of money from trust account

(3) The credit service licensee must pay any money withdrawn from the trust account to the person or persons lawfully entitled to receive that money.

Civil penalty: 5,000 penalty units.

Offence

(4) The credit service licensee commits an offence if:

(a) the credit service licensee is subject to a requirement under subsection (1), (2) or (3); and

(b) the credit service licensee engages in conduct; and

Criminal penalty: 6 months imprisonment.

Trust account money not available for payment of debts etc.

(5) Money paid into a trust account by the credit service licensee under this section:

(a) is not available for the payment of a debt of any other creditor of the credit service licensee; and

(b) is not liable to be attached or taken in execution under the order or process of a court at the instance of any such creditors.

100 Obligation to lodge trust account statement and trust account audit report

Requirement to prepare and lodge trust account statement

(1) The credit service licensee must, for each financial year of the credit service licensee:

(a) prepare a written statement in relation to the trust account (the trust account statement) in accordance with this section; and

(b) lodge the trust account statement with ASIC in accordance with this section.

Civil penalty: 5,000 penalty units.

Requirement to prepare and lodge trust account audit report

(2) The credit service licensee must, with the trust account statement, lodge with ASIC an auditor’s report (the trust account audit report) in accordance with this section.

Civil penalty: 5,000 penalty units.

Requirements for statement and audit report

(3) Each of the trust account statement and trust account audit report must:

(a) be in the approved form; and

(b) contain the information and matters prescribed by the regulations; and

(4) The trust account audit report must be prepared by a person who complies with any eligibility requirements prescribed by the regulations.

Offence

(5) The credit service licensee commits an offence if:

(a) the credit service licensee is subject to a requirement under subsection (1) or (2); and

(b) the credit service licensee engages in conduct; and

Criminal penalty: 5 years imprisonment.

Meaning of financial year

(6) A financial year of the credit service licensee means:

(a) if the credit service licensee is a body corporate to which section 323D of the Corporations Act 2001 applies—a financial year of the body corporate (within the meaning of that section); and

(b) in any other case—a year ending on 30 June.

101 Time of lodgment of trust account statement and trust account audit report

(1) Unless an extension is granted under subsection (3), the trust account statement and trust account audit report must be lodged with ASIC before the day that is 3 months after the end of the financial year of the credit service licensee to which they relate.

(2) If an extension is granted under subsection (3), the trust account statement and trust account audit report must be lodged with ASIC before the end of the extended period.

(3) ASIC may, on application made:

(a) by the credit service licensee and the auditor that is to prepare the trust account audit report; and

(b) before the end of the period that would otherwise apply;

approve an extension of the period for lodging the trust account statement and trust account audit report. The extension may be of the period originally applicable or the period applicable under a previous extension.

(4) An approval may be given subject to any conditions imposed by ASIC.

(5) If an approval is given subject to conditions, the licensee must comply with those conditions.

Division 4—Matters relating to audit reports

102 Auditor’s right of access to records, information etc.

Auditor is entitled to access and assistance etc. from licensee

(1) An auditor (the auditor) who prepares one of the following audit reports (the audit report):

(a) an audit report required under subsection 49(3) in relation to a licensee;

(b) a trust account audit report required under subsection 100(2) in relation to a licensee;

has a right of access at all reasonable times to the financial records or other credit books of the licensee for purposes relating to the audit report.

(2) The auditor is entitled to require:

(a) from the licensee; or

(b) if the licensee is a body corporate—from any director, secretary or senior manager of the licensee;

any assistance and explanations that the auditor desires for purposes relating to the audit report.

Requirement to give auditor access and assistance etc.

(3) The licensee, or a director, secretary or senior manager of the licensee if it is a body corporate, must not:

(a) refuse or fail to allow the auditor access, in accordance with subsection (1), to financial records or other credit books of the licensee; or

(b) refuse or fail to give assistance, or an explanation, to the auditor as and when required under subsection (2); or

Civil penalty: 5,000 penalty units.

Offence

(4) A person commits an offence if:

(a) the person is subject to a requirement under subsection (3); and

(b) the person engages in conduct; and

Criminal penalty: 2 years imprisonment.

103 Auditor’s fees and expenses

(1) The reasonable fees and expenses of the auditor for preparing the audit report are payable by the licensee.

(2) The auditor may recover those fees by action against the licensee.

104 Auditor to report on certain matters

Requirement for auditor to disclose maters

(1) If the auditor, in the performance of duties relating to the audit report, becomes aware of a matter referred to in subsection (2), the auditor must, within 7 days after becoming aware of the matter:

(a) lodge a written report on the matter with ASIC; and

(b) give a copy of the report to the licensee.

Civil penalty: 5,000 penalty units.

Matters that must be disclosed

(2) A report must be given in relation to any matter that, in the opinion of the auditor:

(a) has adversely affected, is adversely affecting or may adversely affect the ability of the licensee to meet the licensee’s obligations as a licensee; or

(b) constitutes or may constitute a contravention of:

(i) Division 2 or 3 (or regulations made under those Divisions); or

(ii) a condition of the licensee’s licence; or

(c) constitutes an attempt to unduly influence, coerce, manipulate or mislead the auditor in the preparation of the audit report.

Offence

(3) The auditor commits an offence if:

(a) the auditor is subject to a requirement under subsection (1); and

(b) the auditor engages in conduct; and

Criminal penalty: 1 year imprisonment.

105 Qualified privilege for auditor etc.

Qualified privilege for auditor

(1) The auditor has qualified privilege in relation to:

(a) a statement that the auditor makes, orally or in writing, in the course of its duties relating to the audit report; or

(b) the lodging of a report with ASIC under subsection 104(1); or

Note: If the auditor is a company, the company has qualified privilege under this subsection in relation to statements made, and reports lodged or sent, by natural persons on behalf of the company if those statements and notices can be properly attributed to the company.

Qualified privilege for registered company auditor acting on behalf of company

(2) If the auditor is a company registered under the Corporations Act 2001, a registered company auditor acting on behalf of the company has qualified privilege in relation to:

(a) a statement that the registered company auditor makes (orally or in writing) in the course of the performance, on behalf of the company, of the company’s duties relating to the audit report; or

(b) the lodging by the registered company auditor, on behalf of the company, of a report with ASIC under subsection 104(1); or

(c) the giving by the registered company auditor, on behalf of the company, of a report to the licensee under subsection 104(1).

Qualified privilege for subsequent publication

(3) A person has qualified privilege in relation to the publishing of a document prepared by the auditor in the course of the auditor’s duties relating to the audit report.

(4) A person has qualified privilege in relation to the publishing of a statement:

(a) made by the auditor as referred to in subsection (1); or

(b) made by a registered company auditor as referred to in subsection (2).

106 Regulations in relation to audit reports etc.

The regulations may make provision in relation to:

(a) the audit reports referred to in subsection 102(1); and

(b) audit reports that persons who have applied for a licence may be requested to lodge under subsection 37(4) or 46A(3); and

(d) auditing standards that must be complied with in relation to those reports.

Part 2‑6—Exemptions and modifications relating to this Chapter

Division 1—Introduction

107 Guide to this Part

This Part is about exemptions from, and modifications of, the provisions of this Chapter.

Division 2 deals with how exemptions and modifications may be made by ASIC or by the regulations.

Division 2—Exemptions and modifications relating to this Chapter

108 Provisions to which this Part applies

The provisions to which this Part applies are:

(a) this Chapter; and

(b) definitions in this Act, as they apply to references in this Chapter; and

109 Exemptions and modifications by ASIC

Exemptions and modifications

(1) ASIC may:

(a) exempt:

(i) a person; or

(ii) a person and all of the person’s credit representatives;

from all or specified provisions to which this Part applies; or

(b) exempt a credit activity that is engaged in in relation to a specified credit contract, mortgage, guarantee or consumer lease from all or specified provisions to which this Part applies; or

(c) declare that provisions to which this Part applies apply in relation to a person, or a credit activity referred to in paragraph (1)(b), as if specified provisions were omitted, modified or varied as specified in the declaration.

(2) An exemption or declaration under subsection (1) is not a legislative instrument.

(3) ASIC may, by legislative instrument:

(a) exempt a class of persons from all or specified provisions to which this Part applies; or

(b) exempt a credit activity (other than a credit activity referred to in paragraph (1)(b)) from all or specified provisions to which this Part applies; or

(d) declare that provisions to which this Part applies apply in relation to a credit activity (other than a credit activity referred to in paragraph (1)(b)), or a class of persons or credit activities, as if specified provisions were omitted, modified or varied as specified in the declaration.

Conditions on exemptions

(4) An exemption may apply unconditionally or subject to specified conditions. A person to whom a condition specified in an exemption applies must comply with the condition. The court may order the person to comply with the condition in a specified way. Only ASIC may apply to the court for the order.

Publication of exemptions and declarations

(5) An exemption or declaration under subsection (1) must be in writing and ASIC must publish notice of it on its website.

Special rules in relation to offences

(6) If conduct (including an omission) of a person would not have constituted an offence if a particular declaration under paragraph (1)(c) or (3)(d) had not been made, that conduct does not constitute an offence unless, before the conduct occurred:

(a) the text of the declaration was published by ASIC on its website; or

(b) ASIC gave written notice setting out the text of the declaration to the person;

(in addition to complying with the requirements of the Legislation Act 2003 if the declaration is made under subsection (3)).

(7) In a prosecution for an offence to which subsection (6) applies, the prosecution must prove that paragraph (6)(a) or (b) was complied with before the conduct occurred.

110 Exemptions and modifications by the regulations

(1) The regulations may:

(a) exempt a person or class of persons from all or specified provisions to which this Part applies; or

(b) exempt a credit activity or a class of credit activities from all or specified provisions to which this Part applies; or

(c) provide that the provisions to which this Part applies apply as if specified provisions were omitted, modified or varied as specified in the regulations.

(2) An exemption that:

(a) is made for the purposes of paragraph (1)(a); and

(b) exempts a person or class of persons from subsection 29(1) to enable testing of particular credit activities;

may apply unconditionally or subject to specified conditions.

(3) A person to whom a condition specified in an exemption applies must comply with the condition. The Court may order the person to comply with the condition in a specified way. Only ASIC may apply to the Court for the order.

(4) An exemption described in subsection (2) may empower ASIC to make decisions relating to how the exemption starts or ceases to apply to a person or class of persons.

Chapter 3—Responsible lending conduct

Part 3‑1—Licensees that provide credit assistance in relation to credit contracts

Division 1—Introduction

111 Guide to this Part

This Part has rules that apply to licensees that provide credit assistance in relation to credit contracts. These rules are aimed at better informing consumers and preventing them from being in unsuitable credit contracts. However, these rules do not apply to a licensee that will be the credit provider under the credit contract.

Division 2 requires a licensee to give its credit guide to a consumer. The credit guide has information about the licensee and some of the licensee’s obligations under this Act.

Division 3 requires a licensee to give a quote before providing credit assistance to a consumer. The quote must set out the maximum amount the consumer will be required to pay to the licensee. The licensee must not charge more than that amount.

Division 4 requires a licensee, before providing credit assistance to a consumer in relation to a credit contract, to make a preliminary assessment as to whether the contract will be unsuitable for the consumer. To do this, the licensee must make inquiries and verifications about the consumer’s requirements, objectives and financial situation. The licensee must give the consumer a copy of the assessment if requested.

Division 5 requires a licensee, when providing credit assistance to a consumer in relation to a credit contract, to give the consumer a document that discloses certain information (for example, the indirect remuneration the licensee is likely to receive).

Division 6 prohibits a licensee from providing credit assistance to a consumer in relation to a credit contract if the contract will be unsuitable for the consumer.

Division 7 prohibits a licensee from providing credit assistance to a consumer in relation to short‑term credit contracts, and imposes requirements on a licensee who makes representations about providing credit assistance in relation to small amount credit contracts. It also imposes requirements in relation to recording the preliminary assessment that a small amount credit contract is not unsuitable.

112 Application of this Part

This Part does not apply in relation to credit assistance provided by a licensee in relation to a credit contract if the licensee is or will be the credit provider under the contract.

Division 2—Credit guide of credit assistance providers

113 Credit guide of credit assistance providers

Requirement to give credit guide

(1) A licensee must, as soon as practicable after it becomes apparent to the licensee that it is likely to provide credit assistance to a consumer in relation to a credit contract, give the consumer the licensee’s credit guide in accordance with subsection (2).

Civil penalty: 5,000 penalty units.

(2) The licensee’s credit guide must:

(a) be in writing; and

(b) be in the form (if any) prescribed by the regulations; and

(d) specify the licensee’s Australian credit licence number; and

(e) give information about:

(i) any fees that are payable by a consumer to the licensee for the licensee’s credit assistance; and

(ii) any charges that are payable by a consumer to the licensee for matters associated with providing the credit assistance; and

(iii) the method for working out the amount of the fees and charges; and

(f) give information about:

(i) if there are 6 or fewer credit providers that the licensee conducts business with when providing credit assistance in relation to credit contracts—the names of those credit providers; and

(ii) if there are more than 6 credit providers that the licensee conducts business with when providing credit assistance in relation to credit contracts—the names of the 6 credit providers with whom the licensee reasonably believes it conducts the most business; and

(g) give information about:

(i) any indirect remuneration that the licensee, or an employee, director or credit representative of the licensee, is likely to receive, directly or indirectly, from credit providers in relation to credit contracts for which the licensee has provided credit assistance; and

(ii) a reasonable estimate of the amounts of that indirect remuneration or the range of those amounts; and

(iii) the method for working out those amounts; and

(h) give information about the licensee’s procedure for resolving disputes with a consumer, including contact details for a consumer to access:

(i) the licensee’s internal dispute resolution procedure; and

(ii) the AFCA scheme; and

(i) give information about the licensee’s obligations under sections 120 and 123; and

(j) comply with any other requirements prescribed by the regulations.

(3) The regulations may prescribe:

(a) information that need not be included in the credit guide, despite subsection (2); and

(b) for the purposes of paragraph (2)(g):

(i) the method for working out amounts of indirect remuneration; and

(ii) how indirect remuneration or amounts of indirect remuneration must be described.

Manner of giving credit guide

(4) The licensee must give the consumer the licensee’s credit guide in the manner (if any) prescribed by the regulations.

Strict liability offence

(5) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

(6) Subsection (5) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

Division 3—Quote for providing credit assistance etc. in relation to credit contracts

114 Quote for providing credit assistance etc.

Requirement to give quote

(1) A licensee must not provide credit assistance to a consumer by:

(a) suggesting that the consumer apply, or assisting the consumer to apply, for a particular credit contract with a particular credit provider; or

(b) suggesting that the consumer apply, or assisting the consumer to apply, for an increase to the credit limit of a particular credit contract with a particular credit provider; or

unless:

(d) the licensee has given the consumer a quote in accordance with subsection (2); and

(e) the consumer has signed and dated that quote or otherwise indicated the consumer’s acceptance of it (and the day that happens) in the manner (if any) prescribed by the regulations; and

(f) the licensee has given the consumer a copy of the accepted quote.

Civil penalty: 5,000 penalty units.

(2) The quote must:

(a) be in writing; and

(b) give information about the credit assistance and other services that the quote covers; and

(c) specify the maximum amount that will be payable by the consumer to the licensee in relation to the licensee’s credit assistance and other services; and

(d) give information about what that amount relates to, including:

(i) the maximum amount of the licensee’s fee for providing the credit assistance and other services; and

(ii) the maximum amount of charges that will be incurred by the licensee for matters associated with providing the credit assistance and other services; and

(iii) the maximum amount of fees or charges that will be payable by the licensee to another person on the consumer’s behalf; and

(e) state whether the maximum amount or any other amount will be payable by the consumer to the licensee if a credit contract is not entered or a credit limit is not increased; and

(f) comply with any other requirements prescribed by the regulations.

Manner of giving quote

(3) The licensee must give the quote to the consumer in the manner (if any) prescribed by the regulations.

No demanding payment of amount exceeding quoted amount

(4) The licensee must not request or demand payment of an amount that exceeds the maximum amount set out in the quote.

Civil penalty: 5,000 penalty units.

No demanding payment before credit assistance provided

(5) The licensee must not request or demand payment of an amount for the licensee’s credit assistance before the licensee provides the assistance.

Civil penalty: 5,000 penalty units.

Caveats

(6) The licensee must not lodge, or threaten to lodge, a caveat in relation to land to induce the consumer to pay an amount to the licensee for the licensee’s credit assistance or other services.

Civil penalty: 5,000 penalty units.

Division 4—Obligations of credit assistance providers before providing credit assistance for credit contracts

115 Obligations of credit assistance providers before providing credit assistance for credit contracts

(1) A licensee must not provide credit assistance to a consumer on a day (the assistance day) by:

(a) suggesting that the consumer apply, or assisting the consumer to apply, for a particular credit contract with a particular credit provider; or

(b) suggesting that the consumer apply, or assisting the consumer to apply, for an increase to the credit limit of a particular credit contract with a particular credit provider;

unless the licensee has, within 90 days (or other period prescribed by the regulations) before the assistance day:

(i) is in accordance with subsection 116(1); and

(ii) covers the period proposed for the entering of the contract or the increase of the credit limit; and

(d) made the inquiries and verification in accordance with section 117.

Civil penalty: 5,000 penalty units.

(2) A licensee must not provide credit assistance to a consumer on a day (the assistance day) by suggesting that the consumer remain in a particular credit contract with a particular credit provider unless the licensee has, within 90 days (or other period prescribed by the regulations) before the assistance day:

(a) made a preliminary assessment that:

(i) is in accordance with subsection 116(2); and

(ii) covers a period in which the assistance day occurs; and

(b) made the inquiries and verification in accordance with section 117.

Civil penalty: 5,000 penalty units.

116 Preliminary assessment of unsuitability of the credit contract

(1) For the purposes of paragraph 115(1)(c), the licensee must make a preliminary assessment that:

(a) specifies the period the assessment covers; and

(b) assesses whether the credit contract will be unsuitable for the consumer if the contract is entered or the credit limit is increased in that period.

(2) For the purposes of paragraph 115(2)(a), the licensee must make a preliminary assessment that:

(a) specifies the period the assessment covers; and

(b) assesses whether the credit contract will be unsuitable for the consumer if the consumer remains in the contract in that period.

Note: The licensee is not required to make a preliminary assessment under this section if the credit assistance is not provided.

117 Reasonable inquiries etc. about the consumer

(1) For the purposes of paragraph 115(1)(d) or 115(2)(b), the licensee must, before making the preliminary assessment:

(a) make reasonable inquiries about the consumer’s requirements and objectives in relation to the credit contract; and

(b) make reasonable inquiries about the consumer’s financial situation; and

(d) make any inquiries prescribed by the regulations about any matter prescribed by the regulations; and

(e) take any steps prescribed by the regulations to verify any matter prescribed by the regulations.

Civil penalty: 5,000 penalty units.

(1A) If:

(a) the credit contract is a small amount credit contract; and

(b) the consumer holds (whether alone or jointly with another person) an account with an ADI into which income payable to the consumer is credited;

the licensee must, in verifying the consumer’s financial situation for the purposes of paragraph 115(1)(d), obtain and consider information about each transaction on the account, and the balances of the account, during at least the immediately preceding period of 90 days.

(1B) Subsection (1A) does not limit paragraph (1)(c) of this section.

(2) The regulations may prescribe particular inquiries or steps that must be made or taken, or do not need to be made or taken, for the purposes of paragraph (1)(a), (b) or (c).

118 When the credit contract must be assessed as unsuitable—entering contract or increasing the credit limit

Requirement to assess the contract as unsuitable

(1) For a preliminary assessment under subsection 116(1) about entering a credit contract or increasing a credit limit of a credit contract, the licensee must assess that the contract will be unsuitable for the consumer if the contract will be unsuitable for the consumer under subsection (2).

Civil penalty: 5,000 penalty units.

Note: Even if the contract will not be unsuitable for the consumer under subsection (2), the licensee may still assess that the contract will be unsuitable for other reasons.

Particular circumstances when the contract will be unsuitable

(2) The contract will be unsuitable for the consumer if, at the time of the preliminary assessment, it is likely that:

(a) the consumer will be unable to comply with the consumer’s financial obligations under the contract, or could only comply with substantial hardship, or

(b) the contract will not meet the consumer’s requirements or objectives; or

(c) if the regulations prescribe circumstances in which a credit contract is unsuitable—those circumstances will apply to the contract;

if the contract is entered in the period proposed for it to be entered or the credit limit is increased in the period proposed for it to be increased.

(3) For the purposes of paragraph (2)(a), it is presumed that, if the consumer could only comply with the consumer’s financial obligations under the contract by selling the consumer’s principal place of residence, the consumer could only comply with those obligations with substantial hardship, unless the contrary is proved.

(3AA) For the purposes of paragraph (2)(a), a consumer is taken to be able to comply with the consumer’s financial obligations under a contract only with substantial hardship if:

(a) the contract is a credit card contract; and

(b) the consumer could not comply with an obligation to repay an amount equal to the credit limit of the contract within the period determined by ASIC under section 160F.

Information to be used to determine if contract will be unsuitable

(4) For the purposes of determining under subsection (2) whether the contract will be unsuitable, only information that satisfies both of the following paragraphs is to be taken into account:

(a) the information is about the consumer’s financial situation, requirements or objectives, or any other matter prescribed by the regulations under paragraph 117(1)(d) or (e);

(b) at the time of the preliminary assessment:

(i) the licensee had reason to believe that the information was true; or

(ii) the licensee would have had reason to believe that the information was true if the licensee had made the inquiries or verification under section 117.

119 When the credit contract must be assessed as unsuitable—remaining in credit contract

Requirement to assess the contract as unsuitable

(1) For a preliminary assessment under subsection 116(2) about remaining in a credit contract, the licensee must assess that the contract will be unsuitable for the consumer if the contract will be unsuitable for the consumer under subsection (2).

Civil penalty: 5,000 penalty units.

Note: Even if the contract will not be unsuitable for the consumer under subsection (2), the licensee may still assess that the contract will be unsuitable for other reasons.

Particular circumstances when the contract will be unsuitable

(2) The contract will be unsuitable for the consumer if, at the time of the preliminary assessment, it is likely that:

(a) the consumer will be unable to comply with the consumer’s financial obligations under the contract, or could only comply with substantial hardship, if the consumer remains in the contract in the period covered by the preliminary assessment; or

(b) the contract will not meet the consumer’s requirements or objectives if the consumer remains in the contract in the period covered by the preliminary assessment; or

(c) if the regulations prescribe circumstances in which a credit contract is unsuitable—those circumstances will apply to the contract if the consumer remains in the contract in the period covered by the preliminary assessment.

(3A) For the purposes of paragraph (2)(a), a consumer is taken to be able to comply with the consumer’s financial obligations under a contract only with substantial hardship if:

(a) the contract is a credit card contract; and

(b) the consumer could not comply with an obligation to repay an amount equal to the credit limit of the contract within the period determined by ASIC under section 160F.

Information to be used to determine if contract will be unsuitable

(4) For the purposes of determining under subsection (2) whether the contract will be unsuitable, only information that satisfies both of the following paragraphs is to be taken into account:

(a) the information is about the consumer’s financial situation, requirements or objectives, or any other matter prescribed by the regulations under paragraph 117(1)(d) or (e);

(b) at the time of the preliminary assessment:

(i) the licensee had reason to believe that the information was true; or

(ii) the licensee would have had reason to believe that the information was true if the licensee had made the inquiries or verification under section 117.

120 Providing the consumer with the preliminary assessment

Requirement to give assessment if requested

(1) If the consumer requests the licensee for a copy of the preliminary assessment within 7 years of the date of the credit assistance quote under section 114, the licensee must give the consumer a written copy of the assessment:

(a) if the request is made within 2 years of the quote—before the end of 7 business days after the day the licensee receives the request; and

(b) otherwise—before the end of 21 business days after the day the licensee receives the request.

Note: The licensee is not required to give the consumer a copy of the preliminary assessment if the licensee does not provide credit assistance to the consumer.

Civil penalty: 5,000 penalty units.

Manner of giving assessment

(2) The licensee must give the consumer the copy of the assessment in the manner (if any) prescribed by the regulations.

No payment for assessment

(3) The licensee must not request or demand payment of an amount for giving the consumer a copy of the preliminary assessment.

Civil penalty: 5,000 penalty units.

Strict liability offence

(4) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1) or (3); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

(5) Subsection (4) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

Division 5—Fees, indirect remuneration etc. relating to credit contracts

121 Fees, indirect remuneration etc. relating to credit contracts

Requirement for disclosure

(1) A licensee must, at the same time as providing credit assistance to a consumer by:

(a) suggesting that the consumer apply, or assisting the consumer to apply, for a particular credit contract with a particular credit provider; or

(b) suggesting that the consumer apply, or assisting the consumer to apply, for an increase to the credit limit of a particular credit contract with a particular credit provider; or

give the consumer a credit proposal disclosure document in accordance with subsection (2).

Civil penalty: 5,000 penalty units.

(2) The credit proposal disclosure document must contain the following:

(a) the total amount of any fees or charges that the consumer is liable to pay to the licensee in relation to the credit contract and the method used for working out that amount;

(b) a reasonable estimate of the total amount of any indirect remuneration that the licensee, or an employee, director or credit representative of the licensee, is likely to receive in relation to the credit contract and the method used for working out that amount;

(c) a reasonable estimate of the total amount of any fees or charges that the consumer is likely to be liable to pay to the credit provider in relation to applying for the credit contract;

(d) a reasonable estimate of the total amount of any fees or charges that the consumer is likely to be liable to pay to any other person in relation to applying for the credit contract;

(e) if the credit is to be applied to pay any of the amounts in the above paragraphs—a reasonable estimate of the likely amount of credit that will be available to the consumer after payments under paragraphs (a), (c) and (d) are made.

(3) For the purposes of paragraph (2)(b), the regulations may prescribe:

(a) the method for working out amounts of indirect remuneration; and

(b) how amounts of indirect remuneration must be described.

Manner of giving credit proposal disclosure document

(4) The licensee must give the credit proposal disclosure document to the consumer in the manner (if any) prescribed by the regulations.

122 No profiting from fees etc. paid to third parties

Requirement not to profit

(1) If, in the course of providing credit assistance to a consumer in relation to a credit contract, a licensee pays an amount (the third party amount) to another person on behalf of the consumer, the licensee must not request or demand payment of an amount, as reimbursement for the third party amount, that exceeds the third party amount.

Civil penalty: 5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 6 months imprisonment.

Division 6—Prohibition on suggesting, or assisting with, unsuitable credit contracts

123 Prohibition on suggesting or assisting consumers to enter, or increase the credit limit under, unsuitable credit contracts

Prohibition on suggesting, or assisting with, unsuitable contracts

(1) A licensee must not provide credit assistance to a consumer by:

(a) suggesting that the consumer apply, or assisting the consumer to apply, for a particular credit contract with a particular credit provider; or

(b) suggesting that the consumer apply, or assisting the consumer to apply, for an increase to the credit limit of a particular credit contract with a particular credit provider;

if the contract will be unsuitable for the consumer under subsection (2).

Civil penalty: 5,000 penalty units.

When the contract will be unsuitable

(2) The contract will be unsuitable for the consumer if, at the time the licensee provides the credit assistance, it is likely that:

(a) the consumer will be unable to comply with the consumer’s financial obligations under the contract, or could only comply with substantial hardship; or

(b) the contract will not meet the consumer’s requirements or objectives; or

(c) if the regulations prescribe circumstances in which a credit contract is unsuitable—those circumstances will apply to the contract;

if the contract is entered in the period proposed for it to be entered or the credit limit is increased in the period proposed for it to be increased.

(3AA) For the purposes of paragraph (2)(a), a consumer is taken to be able to comply with the consumer’s financial obligations under a contract only with substantial hardship if:

(a) the contract is a credit card contract; and

(b) the consumer could not comply with an obligation to repay an amount equal to the credit limit of the contract within the period determined by ASIC under section 160F.

Information to be used to determine if contract will be unsuitable

(4) For the purposes of determining under subsection (2) whether the contract will be unsuitable, only information that satisfies both of the following paragraphs is to be taken into account:

(a) the information is about the consumer’s financial situation, requirements or objectives, or any other matter prescribed by the regulations under paragraph 117(1)(d) or (e);

(b) at the time the licensee provides the credit assistance:

(i) the licensee had reason to believe that the information was true; or

(ii) the licensee would have had reason to believe that the information was true if the licensee had made the inquiries or verification under section 117.

Credit contract not unsuitable under regulations

(5) The regulations may prescribe particular situations in which a credit contract is taken not to be unsuitable for a consumer, despite subsection (2).

Offence

(6) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 2 years imprisonment.

124 Prohibition on suggesting to consumers to remain in unsuitable credit contracts

Prohibition on suggesting to remain in unsuitable contracts

(1) A licensee must not provide credit assistance to a consumer by suggesting that the consumer remain in a particular credit contract with a particular credit provider if the contract is unsuitable for the consumer under subsection (2).

Civil penalty: 5,000 penalty units.

When the contract is unsuitable

(2) The credit contract is unsuitable for the consumer if, at that time the licensee provides the credit assistance:

(a) the consumer is, or is likely to be, unable to comply with the consumer’s financial obligations under the contract, or only able to comply with substantial hardship; or

(b) the contract does not meet the consumer’s requirements or objectives; or

(c) if the regulations prescribe circumstances in which a credit contract is unsuitable—those circumstances apply to the contract.

(3A) For the purposes of paragraph (2)(a), a consumer is taken to be able to comply with the consumer’s financial obligations under a contract only with substantial hardship if:

(a) the contract is a credit card contract; and

(b) the consumer could not comply with an obligation to repay an amount equal to the credit limit of the contract within the period determined by ASIC under section 160F.

Information to be used to determine if contract is unsuitable

(4) For the purposes of determining under subsection (2) whether the contract is unsuitable, only information that satisfies both of the following paragraphs is to be taken into account:

(a) the information is about the consumer’s financial situation, requirements or objectives, or any other matter prescribed by the regulations under paragraph 117(1)(d) or (e);

(b) at the time the licensee provides the credit assistance:

(i) the licensee had reason to believe that the information was true; or

(ii) the licensee would have had reason to believe that the information was true if the licensee had made the inquiries or verification under section 117.

Credit contract not unsuitable under regulations

(5) The regulations may prescribe particular situations in which a credit contract is taken not to be unsuitable for a consumer, despite subsection (2).

Offence

(6) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 2 years imprisonment.

Defence

(7) For the purposes of subsections (1) and (6), it is a defence if:

(a) the licensee suggested that the consumer remain in the credit contract because, after making reasonable inquiries, the licensee reasonably believed that there was no other credit contract that was not unsuitable for the consumer; and

(b) the licensee informed the consumer that there is a procedure under sections 72 and 94 of the National Credit Code for consumers in hardship.

Note: For the purposes of subsection (6), a defendant bears an evidential burden in relation to the matter in subsection (7) (see subsection 13.3(3) of the Criminal Code).

(8) The regulations may prescribe particular inquiries that must be made, or do not need to be made, for the purposes of paragraph (7)(a).

Division 7—Special rules for short‑term and small amount credit contracts

124A Prohibition on providing credit assistance in relation to short‑term credit contracts

Prohibition

(1) A licensee must not provide credit assistance to a consumer by:

(a) suggesting that the consumer apply, or assisting the consumer to apply, for a short‑term credit contract; or

(b) suggesting that the consumer apply, or assisting the consumer to apply, for an increase to the credit limit of a particular short‑term credit contract with a particular credit provider.

Civil penalty: 5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

124B Licensee who makes representations about credit assistance in relation to small amount credit contracts must display and give information

Requirement

(1) If a licensee represents that the licensee provides, or is able to provide, credit assistance to consumers in relation to small amount credit contracts, the licensee must:

(a) display information; and

(b) give information to consumers;

in accordance with any determination made by ASIC under subsection (2).

Civil penalty: 5,000 penalty units.

(2) ASIC may, by legislative instrument, determine one or more of the following matters relating to licensees that make representations described in subsection (1):

(a) the information that the licensees must display;

(b) how the licensees must display the information;

(d) the information that the licensees must give to consumers;

(e) how the licensees must give the information to consumers;

(f) when the licensees must give the information to consumers.

(3) In making the determination under subsection (2), ASIC must take into account the risks associated with small amount credit contracts and the alternatives that may be available to consumers.

Offence

(4) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

124C Written documentation required in relation to the preliminary assessment for a small amount credit contract

(1) If, in a preliminary assessment made for the purposes of paragraph 115(1)(c) or (2)(a), the licensee assesses that a small amount credit contract is not unsuitable for a consumer, before providing credit assistance to the consumer by:

(a) suggesting that the consumer apply, or assisting the consumer to apply, for the small amount credit contract; or

(b) suggesting that the consumer apply, or assisting the consumer to apply, for the increase to the credit limit of the small amount credit contract which is the subject of that preliminary assessment; or

the licensee must document in writing and in accordance with any requirements determined by ASIC under subsection (2):

(d) the preliminary assessment; and

(e) the inquiries and verification made for the purposes of paragraph 115(1)(d) or (2)(b) in relation to that preliminary assessment.

Civil penalty: 5,000 penalty units.

(2) ASIC may, by legislative instrument, determine the form in which the matters in paragraphs (1)(d) and (e) are to be documented in writing.

(3) Before making a determination under subsection (2), ASIC must:

(a) consult the Information Commissioner in relation to matters that relate to the privacy functions (within the meaning of the Australian Information Commissioner Act 2010); and

(b) have regard to any submissions made by the Information Commissioner because of that consultation.

Part 3‑2—Licensees that are credit providers under credit contracts: general rules

Division 1—Introduction

125 Guide to this Part

This Part has rules that apply to licensees that are credit providers. These rules are aimed at better informing consumers and preventing them from being in unsuitable credit contracts.

Division 2 requires a licensee to give its credit guide to a consumer. The credit guide has information about the licensee and some of the licensee’s obligations under this Act.

Division 3 requires a licensee, before doing particular things (such as entering a credit contract), to make an assessment as to whether the contract will be unsuitable. To do this, the licensee must make inquiries and verifications about the consumer’s requirements, objectives and financial situation. The licensee must give the consumer a copy of the assessment if requested.

Division 4 prohibits a licensee from entering or increasing the credit limit of a credit contract that is unsuitable for a consumer.

Division 2—Credit guide of credit providers

126 Credit guide of credit providers

Requirement to give credit guide

(1) A licensee must, as soon as practicable after it becomes apparent to the licensee that it is likely to enter a credit contract with a consumer who will be the debtor under the contract, give the consumer the licensee’s credit guide in accordance with subsection (2).

Civil penalty: 5,000 penalty units.

(2) The licensee’s credit guide must:

(a) be in writing; and

(b) be in the form (if any) prescribed by the regulations; and

(d) specify the licensee’s Australian credit licence number; and

(e) give information about the licensee’s procedure for resolving disputes with a consumer, including contact details for a consumer to access:

(i) the licensee’s internal dispute resolution procedure; and

(ii) the AFCA scheme; and

(f) give information about the licensee’s obligations under sections 132 and 133; and

(g) comply with any other requirements prescribed by the regulations.

(3) The regulations may prescribe information that need not be included in the credit guide, despite subsection (2).

Manner of giving credit guide

(4) The licensee must give the consumer the licensee’s credit guide in the manner (if any) prescribed by the regulations.

Strict liability offence

(5) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

(6) Subsection (5) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

127 Credit guide of credit providers who are assignees

Requirement to give credit guide

(1) A licensee must, as soon as practicable after it has been assigned any rights or obligations of a credit provider under a credit contract, give the debtor under the contract the licensee’s credit guide in accordance with subsection (2).

Civil penalty: 5,000 penalty units.

(2) The licensee’s credit guide must:

(a) be in writing; and

(b) be in the form (if any) prescribed by the regulations; and

(d) specify the licensee’s Australian credit licence number; and

(e) give information about the licensee’s procedure for resolving disputes with a consumer, including contact details for a consumer to access:

(i) the licensee’s internal dispute resolution procedure; and

(ii) the AFCA scheme; and

(f) comply with any other requirements prescribed by the regulations.

(3) The regulations may prescribe information that need not be included in the credit guide, despite subsection (2).

Manner of giving credit guide

(4) The licensee must give the consumer the licensee’s credit guide in the manner (if any) prescribed by the regulations.

Strict liability offence

(5) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

(6) Subsection (5) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

Division 3—Obligation to assess unsuitability

128 Obligation to assess unsuitability

A licensee must not:

(a) enter a credit contract with a consumer who will be the debtor under the contract; or

(aa) make an unconditional representation to a consumer that the licensee considers that the consumer is eligible to enter a credit contract with the licensee; or

(b) increase the credit limit of a credit contract with a consumer who is the debtor under the contract; or

(ba) make an unconditional representation to a consumer that the licensee considers that the credit limit of credit contract between the consumer and the licensee will be able to be increased;

on a day (the credit day) unless the licensee has, within 90 days (or other period prescribed by the regulations) before the credit day:

(i) is in accordance with section 129; and

(ii) covers the period in which the credit day occurs; and

(d) made the inquiries and verification in accordance with section 130.

Civil penalty: 5,000 penalty units.

129 Assessment of unsuitability of the credit contract

For the purposes of paragraph 128(c), the licensee must make an assessment that:

(a) specifies the period the assessment covers; and

(b) assesses whether the credit contract will be unsuitable for the consumer if the contract is entered or the credit limit is increased in that period.

Note: The licensee is not required to make the assessment under this section if the contract is not entered or the credit limit is not increased.

130 Reasonable inquiries etc. about the consumer

Requirement to make inquiries and take steps to verify

(1) For the purposes of paragraph 128(d), the licensee must, before making the assessment:

(a) make reasonable inquiries about the consumer’s requirements and objectives in relation to the credit contract; and

(b) make reasonable inquiries about the consumer’s financial situation; and

(d) make any inquiries prescribed by the regulations about any matter prescribed by the regulations; and

(e) take any steps prescribed by the regulations to verify any matter prescribed by the regulations.

Civil penalty: 5,000 penalty units.

(1A) If:

(a) the credit contract is a small amount credit contract; and

(b) the consumer holds (whether alone or jointly with another person) an account with an ADI into which income payable to the consumer is credited;

the licensee must, in verifying the consumer’s financial situation for the purposes of paragraph 128(d), obtain and consider information about each transaction on the account, and the balances of the account, during at least the immediately preceding period of 90 days.

(1B) Subsection (1A) does not limit paragraph (1)(c) of this section.

(2) The regulations may prescribe particular inquiries or steps that must be made or taken, or do not need to be made or taken, for the purposes of paragraph (1)(a), (b) or (c).

131 When credit contract must be assessed as unsuitable

Requirement to assess the contract as unsuitable

(1) The licensee must assess that the credit contract will be unsuitable for the consumer if the contract will be unsuitable for the consumer under subsection (2).

Civil penalty: 5,000 penalty units.

Note: Even if the contract will not be unsuitable for the consumer under subsection (2), the licensee may still assess that the contract will be unsuitable for other reasons.

Particular circumstances when the contract will be unsuitable

(2) The contract will be unsuitable for the consumer if, at the time of the assessment, it is likely that:

(a) the consumer will be unable to comply with the consumer’s financial obligations under the contract, or could only comply with substantial hardship, if the contract is entered or the credit limit is increased in the period covered by the assessment; or

(b) the contract will not meet the consumer’s requirements or objectives if the contract is entered or the credit limit is increased in the period covered by the assessment; or

(c) if the regulations prescribe circumstances in which a credit contract is unsuitable—those circumstances will apply to the contract if the contract is entered or the credit limit is increased in the period covered by the assessment.

(3AA) For the purposes of paragraph (2)(a), a consumer is taken to be able to comply with the consumer’s financial obligations under a contract only with substantial hardship if:

(a) the contract is a credit card contract; and

(b) the consumer could not comply with an obligation to repay an amount equal to the credit limit of the contract within the period determined by ASIC under section 160F.

Information to be used to determine if contract will be unsuitable

(4) For the purposes of determining under subsection (2) whether the contract will be unsuitable, only information that satisfies both of the following paragraphs is to be taken into account:

(a) the information is about the consumer’s financial situation, requirements or objectives, or any other matter prescribed by the regulations under paragraph 130(1)(d) or (e);

(b) at the time of the assessment:

(i) the licensee had reason to believe that the information was true; or

(ii) the licensee would have had reason to believe that the information was true if the licensee had made the inquiries or verification under section 130.

132 Giving the consumer the assessment

Requirement to give assessment if requested

(1) If, before entering the credit contract or increasing the credit limit, the consumer requests the licensee for a copy of the assessment, the licensee must give the consumer a written copy of the assessment before entering the contract or increasing the credit limit.

Note: The licensee is not required to give the consumer a copy of the assessment if the contract is not entered or the credit limit is not increased.

Civil penalty: 5,000 penalty units.

(2) If, during the period that:

(a) starts on the day (the credit day) the credit contract is entered or the credit limit is increased; and

(b) ends 7 years after that day;

the consumer requests the licensee for a copy of the assessment, the licensee must give the consumer a written copy of the assessment:

(c) if the request is made within 2 years of the credit day—before the end of 7 business days after the day the licensee receives the request; and

(d) otherwise—before the end of 21 business days after the day the licensee receives the request.

Civil penalty: 5,000 penalty units.

Manner of giving assessment

(3) The licensee must give the consumer the copy of the assessment in the manner (if any) prescribed by the regulations.

No payment for assessment

(4) The licensee must not request or demand payment of an amount for giving the consumer a copy of the assessment.

Civil penalty: 5,000 penalty units.

Strict liability offence

(5) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1), (2) or (4); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

(6) Subsection (5) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

Division 4—Prohibition on entering, or increasing the credit limit of, unsuitable credit contracts

133 Prohibition on entering, or increasing the credit limit of, unsuitable credit contracts

Prohibition on entering etc. unsuitable contracts

(1) A licensee must not:

(a) enter a credit contract with a consumer who will be the debtor under the contract; or

(b) increase the credit limit of a credit contract with a consumer who is the debtor under the contract;

if the contract is unsuitable for the consumer under subsection (2).

Civil penalty: 5,000 penalty units.

When the contract is unsuitable

(2) The contract is unsuitable for the consumer if, at the time it is entered or the credit limit is increased:

(a) it is likely that the consumer will be unable to comply with the consumer’s financial obligations under the contract, or could only comply with substantial hardship; or

(b) the contract does not meet the consumer’s requirements or objectives; or

(c) if the regulations prescribe circumstances in which a credit contract is unsuitable—those circumstances apply to the contract.

(3AA) For the purposes of paragraph (2)(a), a consumer is taken to be able to comply with the consumer’s financial obligations under a contract only with substantial hardship if:

(a) the contract is a credit card contract; and

(b) the consumer could not comply with an obligation to repay an amount equal to the credit limit of the contract within the period determined by ASIC under section 160F.

Information to be used to determine if contract will be unsuitable

(4) For the purposes of determining under subsection (2) whether the contract will be unsuitable, only information that satisfies both of the following paragraphs is to be taken into account:

(a) the information is about the consumer’s financial situation, requirements or objectives, or any other matter prescribed by the regulations under paragraph 130(1)(d) or (e);

(b) at the time of the contract is entered or the credit limit is increased, the information:

(i) the licensee had reason to believe that the information was true; or

(ii) the licensee would have had reason to believe that the information was true if the licensee had made the inquiries or verification under section 130.

Credit contract not unsuitable under regulations

(5) The regulations may prescribe particular situations in which a credit contract is taken not to be unsuitable for a consumer, despite subsection (2).

Offence

(6) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 2 years imprisonment.

Note: Sections 178 and 179 provide for remedies for anyone who suffers, or is likely to suffer, loss or damage because of a breach of this section. For example, if a consumer makes an unsuitable credit contract with a licensee, rather than making a not unsuitable credit contract for a reverse mortgage, a person who suffered, or is likely to suffer, loss as a result may be able to get court orders under section 178 or 179 to put the person in a position like the one they would have been in had the consumer entered into the contract for the reverse mortgage.

Part 3‑2A—Licensees that are credit providers under credit contracts: additional rules relating to standard home loans

Division 1—Introduction

133A Guide to this Part

This Part has rules that apply to licensees that are credit providers under standard home loans. It applies in addition to the general rules in Part 3‑2.

Division 2 imposes requirements aimed at ensuring a consumer can obtain a Key Facts Sheet for a standard home loan.

Division 2—Key Facts Sheets for standard home loans

133AA What is a standard home loan?

(1) A standard home loan of a licensee is a standard form of credit contract under which the licensee provides credit:

(a) to purchase residential property; or

(b) to refinance credit that has been provided wholly or predominantly to purchase residential property.

(2) The regulations may make provisions that apply to determining, for the purpose of subsection (1), whether a credit contract is a standard form of credit contract.

133AB What is a Key Facts Sheet for a standard home loan?

(1) A Key Facts Sheet for a standard home loan is a document:

(a) that contains the information relating to the standard home loan that is required by the regulations; and

(b) that complies with any other requirements prescribed by the regulations.

(2) Without limiting paragraph (1)(a), regulations made for the purpose of that paragraph:

(a) may require a Key Facts Sheet for a standard home loan to contain information:

(i) that is specific to the consumer by whom the Key Facts Sheet is to be generated under section 133AC or to whom it is to be provided under section 133AD; and

(ii) that relates to the cost or implications of the loan for the consumer; and

(b) may require information contained in a Key Facts Sheet for a standard home loan to be based on either or both of the following:

(i) information provided by the consumer;

(ii) particular assumptions.

133AC Credit provider’s website to provide capacity to generate Key Facts Sheet

When this section applies

(1) This section applies if a licensee has a website that can be used by a consumer to apply for, or make an inquiry about, one or more standard home loans of the licensee.

Requirement

(2) The licensee must ensure that the website satisfies all of the following paragraphs:

(a) the website tells the consumer that the consumer may use the website to generate a Key Facts Sheet for the standard home loan, or for each of the standard home loans;

(b) the website:

(i) tells the consumer what information the consumer will need to enter in order to generate the Key Facts Sheet or Sheets; and

(ii) provides the consumer with instructions on how to generate the Key Facts Sheet or Sheets;

(c) if the consumer enters the information and follows those instructions, the consumer can use the website to generate the Key Facts Sheet or Sheets, containing up‑to‑date information, in a form that can be printed;

(d) the website complies with any other requirements prescribed by the regulations.

Civil penalty: 5,000 penalty units.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement under subsection (2); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

133AD Credit provider to provide Key Facts Sheet in other situations

When this section applies

(1) This section applies if:

(a) either:

(i) a consumer makes a request to a licensee (otherwise than by using a website of the licensee) to be provided with a Key Facts Sheet for one or more standard home loans of the licensee that are specified in the request; or

(ii) the regulations require a consumer, in circumstances prescribed by the regulations, to be provided with a Key Facts Sheet for one or more standard home loans of a licensee; and

(b) the consumer has given the licensee the consumer’s name, and the contact details required by the regulations.

Requirement

(2) The licensee must, in accordance with any requirements prescribed by the regulations:

(a) provide the consumer with a Key Facts Sheet containing up‑to‑date information for the standard home loan, or for each of the standard home loans; and

(b) provide the consumer with any other information relating to other standard home loans of the licensee that is required by the regulations.

Note: Subsection 133AE(4) and section 133AF provide defences to liability under this subsection.

Civil penalty: 5,000 penalty units.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement under subsection (2); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

Note: Subsection 133AE(4) and section 133AF provide defences to liability under this subsection.

133AE What if more information is needed from the consumer?

When this section applies

(1) This section applies if:

(a) a licensee is required by section 133AD to provide a consumer with a Key Facts Sheet for a standard home loan; but

(b) the licensee does not have all the information from the consumer that the licensee needs in order to be able to prepare the Key Facts Sheet.

Requirement

(2) The licensee must, in accordance with any requirements prescribed by the regulations, tell the consumer what information the licensee needs in order to be able to prepare the Key Facts Sheet.

Civil penalty: 5,000 penalty units.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement under subsection (2); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

Defence for subsections 133AD(2) and (3)

(4) For the purposes of applying subsections 133AD(2) and (3) to a failure by a licensee to provide a Key Facts Sheet to a consumer, it is a defence if:

(a) the licensee has, in accordance with subsection (2) of this section, told the consumer what information the licensee needs in order to be able to prepare the Key Facts Sheet; and

(b) the consumer has not provided that information to the licensee.

Note: For the purpose of subsection 133AD(3), a defendant bears an evidential burden in relation to the matter in this subsection (see subsection 13.3(3) of the Criminal Code).

133AF Defences to obligation to provide a Key Facts Sheet

(1) For the purpose of applying subsection 133AD(2) or (3) to a failure by a licensee to provide a consumer with a Key Facts Sheet (the new Key Facts Sheet) for a standard home loan, it is a defence if:

(a) the following conditions are satisfied:

(i) the licensee has previously provided the consumer with a Key Facts Sheet (the previous Key Facts Sheet) for the standard home loan;

(ii) the new Key Facts Sheet would be the same (except for its date) as the previous Key Facts Sheet; or

(b) the licensee reasonably believes that:

(i) another person has previously provided the consumer with a Key Facts Sheet (the previous Key Facts Sheet) for the standard home loan; and

(ii) the new Key Facts Sheet would be the same (except for its date) as the previous Key Facts Sheet; or

(d) under regulations made for the purpose of subsection (2), the licensee is not required to provide the consumer with the new Key Facts Sheet.

Note: For the purpose of subsection 133AD(3), a defendant bears an evidential burden in relation to the matters in this subsection (see subsection 13.3(3) of the Criminal Code).

(2) The regulations may prescribe circumstances in which a licensee is not required to provide a consumer with a Key Facts Sheet for a standard home loan.

Part 3‑2B—Licensees that are credit providers under credit contracts: additional rules relating to credit card contracts

Division 1—Introduction

133B Guide to this Part

This Part has rules that apply to licensees that are credit providers under credit card contracts. It applies in addition to the general rules in Part 3‑2.

Division 2 defines key concepts used in this Part (including credit card contract and credit card).

Division 3 imposes requirements aimed at ensuring a consumer obtains a Key Facts Sheet before entering into a credit card contract.

Division 4 imposes restrictions on a licensee making offers etc. to increase the credit limit of a credit card contract, and imposes requirements aimed at ensuring the consumer can reduce the credit limit of a credit card contract.

Division 5 provides for consumers to be notified if a credit card is used in excess of its credit limit, and restricts the charging of fees etc. for use of a credit card in excess of its credit limit.

Division 6 imposes requirements relating to the order of application of payments made under credit card contracts. Generally, a payment must be applied against higher interest rate debts first.

Division 7 imposes requirements relating to application of interest charges under credit card contracts.

Division 8 imposes requirements aimed at ensuring the consumer can terminate a credit card contract.

Division 2—Credit card contracts and related concepts

133BA Meaning of credit card contract etc.

Meaning of credit card contract

(1) A credit card contract is a continuing credit contract under which credit is ordinarily obtained only by the use of a credit card.

Meaning of credit card

(2) A credit card is:

(a) a card of a kind commonly known as a credit card; or

(b) a card of a kind that persons carrying on business commonly issue to their customers, or prospective customers, for use in obtaining goods or services from those persons on credit; or

Meaning of linked to a credit card contract

(3) A credit card is linked to a credit card contract if:

(a) the credit card is issued under or in relation to the contract; and

(b) the credit card can be used to obtain credit under the contract as referred to in subsection (1).

Meaning of use of a credit card

(4) A reference to the use of a credit card to obtain cash, goods or services includes a reference to the use or provision of the number of the credit card to obtain cash, goods or services.

Articles that can be used as credit cards and in other ways

(5) If a credit card can also be used in other ways (for example, as a debit card, or to access other accounts):

(a) the article is a credit card (despite the fact that it can also be used in those other ways); but

(b) the provisions of this Act that are expressed to apply in relation to credit cards do not apply to the article in so far as it can be used in those other ways.

Division 3—Key Facts Sheets for credit card contract

133BB What is a Key Facts Sheet for a credit card contract?

A Key Facts Sheet for a credit card contract is a document:

(a) that contains the information relating to the contract that is required by the regulations; and

(b) that complies with any other requirements prescribed by the regulations.

133BC Application form for credit card contract to include up‑to‑date Key Facts Sheet

Requirement

(1) If a licensee makes available to consumers an application form that can be used to apply for a credit card contract under which the licensee would be the credit provider, the licensee must ensure that the application form includes a Key Facts Sheet for the contract that contains up‑to‑date information.

Civil penalty: 5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

Circumstances in which application form may, for limited period, include out‑of‑date Key Facts Sheet

(3) The regulations may prescribe circumstances in which a licensee may, for a period prescribed by the regulations, make available an application form that includes a Key Facts Sheet containing information that has ceased to be up‑to‑date.

Note: If a consumer applies using such an application form, the consumer must be given the up‑to‑date information: see paragraph 133BD(1)(b).

(4) If a licensee makes available an application form that includes a Key Facts Sheet containing information that has ceased to be up‑to‑date, it is a defence for the purposes of subsections (1) and (2) if the application form was made available as permitted by regulations made for the purpose of subsection (3).

Note: For the purpose of subsection (2), a defendant bears an evidential burden in relation to the matter in this subsection (see subsection 13.3(3) of the Criminal Code).

133BD Credit provider not to enter into credit card contract unless Key Facts Sheet has been provided etc.

Requirement

(1) If a consumer applies to a licensee for a credit card contract under which the licensee would be the credit provider, the licensee must not enter into, or offer to enter into, the contract unless:

(a) the application is made using an application form that includes a Key Facts Sheet for the contract that contains up‑to‑date information; or

(b) the following conditions are satisfied:

(i) the application is made using an application form that includes a Key Facts Sheet for the contract that contains information that has ceased to be up‑to‑date;

(ii) the consumer has been provided with the up‑to‑date information in accordance with any requirements prescribed by the regulations; or

(c) the consumer has otherwise been provided with a Key Facts Sheet for the contract that contains up‑to‑date information in accordance with any requirements prescribed by the regulations.

Civil penalty: 5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 100 penalty units.

Division 4—Offers etc. to increase, and entitlement to reduce, credit limit of credit card contract

133BE Credit provider not to offer etc. to increase credit limit of credit card contract

Requirement

(1) A licensee who is the credit provider under a credit card contract must not make a credit limit increase invitation in relation to the contract.

Civil penalty: 5,000 penalty units.

Note: For other provisions that must be complied with in relation to increasing credit limits, see:

(a) Divisions 3 and 4 of Part 3‑2; and

(b) subsection 67(4) of the National Credit Code.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 100 penalty units.

Strict liability offence

(3) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 20 penalty units.

(4) Subsection (3) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

Meaning of credit limit increase invitation

(5) A licensee makes a credit limit increase invitation, in relation to a credit card contract, if:

(a) the licensee gives any form of communication that relates to the contract to the consumer who is the debtor under the contract; and

(b) one or more of the following conditions is satisfied in relation to the communication:

(i) the communication offers to increase the credit limit of the contract;

(ii) the communication invites the consumer to apply for an increase of the credit limit of the contract;

(iii) the licensee gave the communication to the consumer for the purpose (or for purposes including the purpose) of encouraging the consumer to consider applying for an increase of the credit limit of the contract.

(6) The regulations may make provisions that apply to determining whether a communication is covered by the definition in subsection (5).

133BF Credit provider not to enter into credit card contract unless it allows credit limit to be reduced

Requirement

(1) A licensee must not enter into, or offer to enter into, a credit card contract under which the licensee would be the credit provider, if the consumer who would be the debtor under the contract would not have a credit limit reduction entitlement under the contract.

Civil penalty: 5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

Meaning of credit limit reduction entitlement

(3) A consumer who is the debtor under a credit card contract has a credit limit reduction entitlement under the contract if:

(a) for a contract that does not provide for a minimum credit limit—the consumer is entitled under the contract to reduce the credit limit of the contract to any amount (including nil); or

(b) for a contract that provides for a minimum credit limit—the consumer is entitled under the contract to reduce the credit limit of the contract to any amount that equals, or exceeds, the minimum credit limit.

133BFA Credit provider to provide online capacity to request reduction of credit limit

When this section applies

(1) This section applies if a consumer who is the debtor under a credit card contract has a credit limit reduction entitlement under the contract on a day (the online reduction day).

Requirement

(2) The licensee who is the credit provider under the credit card contract must establish and maintain a website that satisfies all of the following paragraphs:

(a) the website tells the consumer that the consumer may use the website to request a reduction in the consumer’s credit limit;

(b) the website:

(i) tells the consumer what information the consumer will need to enter in order to request a reduction in the consumer’s credit limit; and

(ii) provides the consumer with instructions on how to request a reduction in the consumer’s credit limit;

(c) if the consumer enters the information and follows those instructions, the consumer can use the website to request a reduction in the consumer’s credit limit;

(d) the website is available on the online reduction day.

Civil penalty: 5,000 penalty units.

Defence

(3) For the purposes of subsection (2), it is a defence if the website is reasonably unavailable on the online reduction day.

133BFB Credit provider not to suggest the consumer not reduce the credit limit

When this section applies

(1) This section applies if:

(a) a consumer who is the debtor under a credit card contract has a credit limit reduction entitlement under the contract; and

(b) the consumer has requested to exercise the entitlement by reducing the credit limit of the contract.

Requirement

(2) The licensee who is the credit provider under the credit card contract must not do any of the following:

(a) suggest that the consumer apply for an increase to the credit limit of the contract;

(b) suggest that the consumer not reduce the credit limit of the contract;

(c) if the consumer’s request is to reduce the credit limit of the contract by a specified amount—suggest that the consumer instead reduce the credit limit by a smaller amount.

Civil penalty: 5,000 penalty units.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement under subsection (2); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

133BFC Credit provider to give effect to request to reduce credit limit

When this section applies

(1) This section applies if:

(a) a consumer who is the debtor under a credit card contract has a credit limit reduction entitlement under the contract; and

(b) the consumer has requested to exercise the entitlement by reducing the credit limit of the contract.

Requirement

(2) The licensee who is the credit provider under the credit card contract must take reasonable steps to ensure that the request is given effect to as soon as practicable.

Civil penalty: 5,000 penalty units.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement under subsection (2); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

Division 5—Use of credit card in excess of credit limit

133BH Credit provider to notify consumer of use of credit card in excess of credit limit

Regulations may require licensee to notify consumer of use of credit card in excess of credit limit

(1) The regulations may require a licensee who is the credit provider under a credit card contract to notify the consumer who is the debtor under the contract if the licensee becomes aware that the debtor has used a credit card that is linked to the contract to obtain cash, goods or services in excess of the credit limit for the contract.

(2) Without limiting subsection (1), regulations made for the purpose of that subsection may deal with:

(a) how and when the licensee must notify the consumer; and

(b) the matters that must be included in the notification.

Requirement to comply with the regulations

(3) A licensee must comply with regulations made for the purpose of subsection (1).

Civil penalty: 5,000 penalty units.

Offence

(4) A person commits an offence if:

(a) the person is subject to a requirement under subsection (3); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

133BI Credit provider not to impose fees etc. because credit card used in excess of credit limit

(1) If a credit card is used to obtain cash, goods or services in excess of the credit limit for the credit card contract, the licensee who is the credit provider under the contract must not, because the credit limit was exceeded, impose any liability to pay fees or charges, or a higher rate of interest, on the consumer who is the debtor under the contract unless:

(a) the licensee has, in accordance with this section, obtained express consent from the consumer covering the imposition of the fees or charges, or the higher rate of interest; and

(b) the consent has not been withdrawn; and

Note 1: The consent must be express, and cannot be implied from the actions of the consumer or from other circumstances.

Note 2: The licensee must keep records of consents and withdrawals: see section 133BJ.

(2) The consumer may consent to the licensee imposing a liability to pay fees or charges, or a higher rate of interest, if the credit card is used to obtain cash, goods or services in excess of the credit limit.

(3) Before obtaining the consumer’s consent, the licensee must, in accordance with the regulations, inform the consumer of any matters prescribed by the regulations.

(4) The consent may be obtained before or after the credit card contract is entered into, but it does not cover any fees, charges or interest imposed before the consent is obtained.

(5) The consumer may withdraw the consent at any time.

(6) The regulations may prescribe requirements to be complied with in relation to giving consent under subsection (2), or withdrawing consent under subsection (5).

(7) For the purpose of subsection 23(1) of the National Credit Code (and the other provisions of the Code that refer to, or apply in relation to, that subsection):

(a) a liability to pay a fee or charge that is imposed contrary to subsection (1) of this section is taken to be a credit fee or charge that is prohibited by the Code; and

(b) a liability to pay interest that is imposed contrary to subsection (1) of this section is taken to be an interest charge under the credit card contract exceeding the amount that may be charged consistently with the Code.

Note: For the civil and criminal consequences of contravening subsection 23(1) of the National Credit Code, see subsections 23(2) to (4), section 24, and Part 6, of the Code.

133BJ Records of consents and withdrawals to be kept

Requirement

(1) A licensee must, in accordance with the requirements prescribed by the regulations, keep a record of:

(a) consents the licensee obtains under section 133BI; and

(b) withdrawals of such consents.

Civil penalty: 5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

Division 6—Order of application of payments made under credit card contracts

133BO Credit provider to apply payments in accordance with this Division

Requirement

(1) If a payment (the relevant payment) is made under a credit card contract:

(a) by or on behalf of the consumer who is the debtor under the contract; and

(b) to the licensee who is the credit provider under the contract;

the licensee must apply the payment in accordance with this Division (despite any provision to the contrary in the contract, any other contract or instrument or any other law).

Civil penalty: 5,000 penalty units.

(2) To avoid doubt, an amount:

(a) that is credited to the consumer’s account by the licensee; and

(b) that is, or is in the nature of:

(i) a total or partial refund in relation to a transaction entered into using the credit card; or

(ii) a total or partial reversal of such a transaction;

is not a payment to which subsection (1) applies.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 100 penalty units.

Strict liability offence

(4) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 20 penalty units.

(5) Subsection (4) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

133BP Agreement to apply payment against particular amount owed

(1) This section applies if, at the time when the licensee applies the relevant payment, the following conditions are satisfied:

(a) the consumer has requested the licensee to apply certain payments made under the credit card contract against a particular amount:

(i) owed by the consumer to the licensee under the contract; and

(ii) in relation to which any other requirements prescribed by the regulations are satisfied;

(b) the licensee has agreed to the request;

(d) neither the request, nor the agreement to the request, has been withdrawn in accordance with this section.

(2) The licensee must apply the relevant payment against the amount referred to in paragraph (1)(a) in accordance with the request.

(3) The consumer may withdraw the request at any time.

(4) The licensee may withdraw the agreement to the request, but only if the consumer has consented to the withdrawal.

(5) The regulations may prescribe requirements to be complied with in relation to any of the following:

(a) making a request under paragraph (1)(a);

(b) agreeing to a request under paragraph (1)(b);

(d) withdrawing agreement to a request under subsection (4);

(e) consenting under subsection (4) to the withdrawal of agreement to a request.

133BQ Application of payment against last statement balance, with higher interest debts to be discharged first

(1) Subject to subsection (2), the licensee must apply the relevant payment (or any part of the relevant payment remaining after complying with section 133BP) against so much as remains owing of the closing balance shown in the last statement of account for the credit card contract that the licensee gave the consumer before the relevant payment was made.

(2) If different annual percentage rates apply to different parts of that closing balance, the licensee must apply the relevant payment (or any remaining part of the payment) first to the part of that balance to which the highest rate applies, next to the part of that balance to which the next highest rate applies, and so on.

133BR Application of any remaining part of the relevant payment

The licensee must apply any part of the relevant payment remaining after complying with sections 133BP and 133BQ in accordance with the terms of the credit card contract.

Division 7—Calculation of interest under credit card contracts

133BS Credit provider not to impose retrospective interest charges

Requirement

(1) A licensee who is the credit card provider under a credit card contract must not, in relation to a statement period covered by a statement of account, impose on the consumer who is the debtor under the contract a liability to pay a rate of interest if the rate of interest would:

(a) be applied to the balance, or a part of the balance, of the credit card contract on a day in the statement period; and

(b) be applied because of facts or circumstances coming into existence after that day; and

(c) be higher than the rate of interest (including nil) that would have been applied to that balance, or that part of the balance, on that day if those facts and circumstances had not come into existence.

Civil penalty: 5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

Division 8—Ending credit card contracts

133BT Credit provider not to enter into credit card contract unless it allows for termination of contracts

Requirement

Civil penalty: 5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

Meaning of credit card termination entitlement

(3) A consumer who is the debtor under a credit card contract has a credit card termination entitlement under the contract if the consumer is entitled, under the contract, to terminate the credit card contract.

133BU Credit provider to provide online capacity to request termination of credit card contract

When this section applies

(1) This section applies if a consumer who is the debtor under a credit card contract has a credit card termination entitlement under the contract on a day (the online termination day).

Requirement

(2) The licensee who is the credit provider under the credit card contract must establish and maintain a website that satisfies all of the following paragraphs:

(a) the website tells the consumer that the consumer may use the website to request to terminate the credit card contract;

(b) the website:

(i) tells the consumer what information the consumer will need to enter in order to request to terminate the credit card contract; and

(ii) provides the consumer with instructions on how to request to terminate the credit card contract;

(c) if the consumer enters the information and follows those instructions, the consumer can use the website to request to terminate the credit card contract;

(d) the website is available on the online termination day.

Civil penalty: 5,000 penalty units.

Defence

(3) For the purposes of subsection (2), it is a defence if the website is reasonably unavailable on the online termination day.

133BV Credit provider not to suggest the consumer not terminate the credit card contract

When this section applies

(1) This section applies if:

(a) a consumer who is the debtor under a credit card contract has a credit card termination entitlement under the contract; and

(b) the consumer has requested to terminate the credit card contract.

Requirement

(2) The licensee who is the credit provider under the credit card contract must not suggest that the consumer remain in the credit card contract.

Civil penalty: 5,000 penalty units.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement under subsection (2); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

133BW Credit provider to give effect to request to terminate credit card contract

When this section applies

(1) This section applies if:

(a) a consumer who is the debtor under a credit card contract has a credit card termination entitlement under the contract; and

(b) the consumer has requested to terminate the consumer’s credit card contract.

Requirement

(2) The licensee who is the credit provider under the credit card contract must take reasonable steps to ensure that the request is given effect to as soon as practicable.

Civil penalty: 5,000 penalty units.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement under subsection (2); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

Part 3‑2C—Licensees that are credit providers under credit contracts: additional rules relating to short‑term and small amount credit contracts

Division 1—Introduction

133C Guide to this Part

This Part has rules that apply to licensees who are, or are to be, credit providers under short‑term credit contracts and small amount credit contracts. It applies in addition to the general rules in Part 3‑2.

Division 2 prohibits a licensee from entering into, or increasing the credit limit of, short‑term credit contracts. It also imposes requirements on a licensee who makes representations about entering into small amount credit contracts and prohibits a licensee from entering into, or offering to enter into, small amount credit contracts in certain circumstances. Division 2 imposes requirements in relation to recording the assessment that a small amount credit contract is not unsuitable and prohibits a licensee from making certain unsolicited communications in relation to small amount credit contracts. It also provides that the consumer is not liable to pay certain fees and charges under small amount credit contracts in certain circumstances.

Division 2—Short‑term and small amount credit contracts

133CA Prohibition on entering, or increasing the credit limit of, short‑term credit contracts

Prohibition

(1) A licensee must not:

(a) enter a short‑term credit contract with a consumer who will be the debtor under the contract; or

(b) increase the credit limit of a short‑term credit contract with a consumer who is the debtor under the contract.

Civil penalty: 5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

133CB Licensee who makes representations in relation to small amount credit contracts must display and give information

Requirement

(1) If a licensee represents that the licensee enters into, or is able to enter into, small amount credit contracts with consumers under which the licensee would be the credit provider, the licensee must:

(a) display information; and

(b) give information to consumers;

in accordance with any determination made by ASIC under subsection (2).

Civil penalty: 5,000 penalty units.

(2) ASIC may, by legislative instrument, determine one or more of the following matters relating to licensees that make representations described in subsection (1):

(a) the information that the licensees must display;

(b) how the licensees must display the information;

(d) the information that the licensees must give to consumers;

(e) how the licensees must give the information to consumers;

(f) when the licensees must give the information to consumers.

(3) In making a determination under subsection (2), ASIC must take into account the risks associated with small amount credit contracts and the alternatives that may be available to consumers.

Offence

(4) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

133CC Licensee must not enter into a small amount credit contract if the repayments do not meet the prescribed requirements

Requirement

(1) A licensee must not enter into, or offer to enter into, a small amount credit contract with a consumer who will be the debtor under the contract if the repayments that would be required under the contract would not meet the requirements prescribed by the regulations.

Civil penalty: 5,000 penalty units.

Note: For example, the regulations may provide that the amount of a repayment must not exceed a specified percentage of the consumer’s income.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 50 penalty units.

Loss of certain fees and charges

(3) If a licensee enters into a small amount credit contract in contravention of subsection (1), then:

(a) the consumer is not liable (and is taken never to have been liable) to pay a fee or charge of a kind mentioned in paragraph 31A(1)(a), (b), (c) or (d) of the National Credit Code under that small amount credit contract (whether or not the liability is imposed consistently with the National Credit Code); and

(b) the consumer may recover as a debt due to the consumer any amounts paid by the consumer that, in accordance with paragraph (a) of this subsection, the consumer is not liable to pay (or is taken never to have been liable to pay).

133CD Licensee must not enter into a small amount credit contract if repayment amounts and intervals are not equal

Requirement

(1) A licensee must not enter into, or offer to enter into, a small amount credit contract with a consumer who will be the debtor under the contract if any of the following applies:

(a) repayments that would be required under the contract are not equal;

(b) the intervals between repayment dates would not be equal;

(c) the interval between the date on which credit would be first provided under the contract and the first repayment date would be longer than twice the interval between the first repayment date and the second repayment date.

Civil penalty: 5,000 penalty units.

(2) For the purposes of paragraph (1)(a), repayments that would be required under a small amount credit contract are taken to be equal if:

(a) each repayment is of the same amount; or

(b) both of the following apply:

(i) each repayment (other than the last repayment) is the same amount;

(ii) the last repayment is up to 5% less than each other repayment; or

(3) A repayment date in relation to a small amount credit contract is the date on or by which a repayment is required to be made under the contract.

(4) For the purposes of paragraph (1)(b), if a small amount credit contract provides that:

(a) repayments that would be required under the contract are to be made on or by a fixed day of each week, fortnight or month; and

(b) if that fixed day falls on a day that is not a business day—the repayment would be required to be made on or by the immediately preceding or succeeding business day;

the intervals between repayment dates are taken to be equal.

(5) ASIC may, by legislative instrument, determine conditions for the purposes of paragraph (2)(c).

(6) Nothing in this section is intended to limit the regulations which may be made for the purposes of section 133CC.

Offence

(7) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 100 penalty units.

Strict liability offence

(8) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 10 penalty units.

(9) Subsection (8) is an offence of strict liability.

133CE Written documentation required in relation to the assessment for a small amount credit contract

(1) If, in an assessment made for the purposes of paragraph 128(c), the licensee assesses that a small amount credit contract is not unsuitable for a consumer, before:

(a) entering into the small amount credit contract with the consumer; or

(b) making an unconditional representation to the consumer that the licensee considers that the consumer is eligible to enter into the small amount credit contract with the licensee; or

(d) making an unconditional representation to the consumer that the licensee considers that the credit limit of the small amount credit contract between the consumer and the licensee will be able to be increased;

the licensee must document in writing and in accordance with any requirements determined by ASIC under subsection (2):

(e) the assessment; and

(f) the inquiries and verification made for the purposes of paragraph 128(d) in relation to that assessment.

Civil penalty: 5,000 penalty units.

(2) ASIC may, by legislative instrument, determine the form in which the matters in paragraphs (1)(e) and (f) are to be documented in writing.

(3) Before making a determination under subsection (2), ASIC must:

(a) consult the Information Commissioner in relation to matters that relate to the privacy functions (within the meaning of the Australian Information Commissioner Act 2010); and

(b) have regard to any submissions made by the Information Commissioner because of that consultation.

133CF Licensee not to make certain unsolicited communications in relation to a small amount credit contract

Prohibition on certain unsolicited communications

(1) A licensee must not make, or arrange for the making of, an unsolicited communication to a consumer (whether orally, in writing or by electronic means) that contains:

(a) an offer to the consumer to enter into a small amount credit contract; or

(b) an invitation to the consumer to apply for a small amount credit contract;

if any of the following apply:

(d) the consumer has at any time applied for a small amount credit contract with the licensee;

(e) the consumer:

(i) is, or has at any time been, a debtor under a small amount credit contract with another credit provider; or

(ii) has at any time applied for a small amount credit contract with another credit provider;

and a reasonable person in the licensee’s position would, if the person undertook such inquiries as are reasonable in the circumstances, be aware of the matter in subparagraph (i) or (ii) (whichever applies).

Civil penalty: 5,000 penalty units.

Meaning of unsolicited communication to a consumer

(2) An unsolicited communication to a consumer is a communication to a consumer or a consumer’s agent that is made by a person by dealing directly with the consumer or the consumer’s agent in any of the following circumstances:

(a) no prior request has been made by the consumer to the licensee for that communication;

(b) the consumer has made a prior request to the licensee for that communication and that request was solicited by or on behalf of the licensee;

However, the regulations may prescribe that specified kinds of communications are not unsolicited communications to which this section applies.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person engages in conduct; and

Criminal penalty: 100 penalty units.

Loss of certain fees and charges

(4) If:

(a) a licensee makes an unsolicited communication to a consumer in contravention of subsection (1); and

(b) the licensee enters into a small amount credit contract with that consumer within 30 days after that unsolicited communication is made;

then:

(c) the consumer is not liable (and is taken never to have been liable) to pay a fee or charge of a kind mentioned in paragraph 31A(1)(a), (b), (c) or (d) of the National Credit Code under that small amount credit contract (whether or not the liability is imposed consistently with the National Credit Code); and

(d) the consumer may recover as a debt due to the consumer any amounts paid by the consumer that, in accordance with paragraph (c) of this subsection, the consumer is not liable to pay (or is taken never to have been liable to pay).

Part 3‑2CA—Licensees supplying credit information to credit reporting bodies etc.

Division 1—Introduction

133CM Guide to this Part

This Part has rules that apply to licensees that are large ADIs or are of a prescribed kind.

Each licensee must supply certain information to eligible credit reporting bodies about all of the open credit accounts held with the licensee or with other members of the licensee’s corporate group.

Each licensee must then supply updated information to those credit reporting bodies on an ongoing basis.

Conditions may need to be met before the credit reporting bodies who are supplied with this information can further disclose this information to credit providers.

This Part applies in addition to the Privacy Act 1988.

133CN Meanings of eligible licensee and eligible credit reporting body

(1) A licensee is an eligible licensee, on 1 July 2021 or a later day, if on that day the licensee:

(a) is a large ADI, or is a body corporate of a kind prescribed by the regulations; and

(b) is a credit provider.

(2) A credit reporting body is an eligible credit reporting body for a licensee if:

(a) the following conditions are met:

(i) an agreement of the kind referred to in paragraph 20Q(2)(a) of the Privacy Act 1988 between the body and the licensee was in force on 2 November 2017;

(ii) the licensee is an eligible licensee on 1 July 2021; or

(b) the conditions (if any) prescribed by the regulations are met.

133CO Meaning of eligible credit account

(1) An eligible credit account is an account that:

(a) relates to the provision, or possible provision, of consumer credit (within the meaning of the Privacy Act 1988); and

(b) is held by one or more natural persons with a credit provider; and

(2) ASIC may, by legislative instrument, determine one or more kinds of account for the purposes of paragraph (1)(c).

133CP Meaning of mandatory credit information

(1) Mandatory credit information, for eligible credit accounts held by natural persons with a credit provider, is personal information (other than sensitive information) for those accounts that is:

(a) identification information (within the meaning of the Privacy Act 1988) about the natural persons; or

(b) consumer credit liability information (within the meaning of the Privacy Act 1988) about the natural persons; or

(d) financial hardship information about the natural persons; or

(e) default information (within the meaning of the Privacy Act 1988) about the natural persons; or

(f) payment information (within the meaning of the Privacy Act 1988) about the natural persons; or

(g) new arrangement information (within the meaning of the Privacy Act 1988) about the natural persons.

(2) Despite paragraph (1)(c), mandatory credit information does not include repayment history information (within the meaning of the Privacy Act 1988) that comes into existence more than 3 months before the first 1 July on which:

(a) if the credit provider is a member of a banking group—the head company of the group is an eligible licensee; or

(b) otherwise—the credit provider is an eligible licensee.

(3) Despite paragraph (1)(d), mandatory credit information does not include financial hardship information that comes into existence:

(a) before 1 July 2022; or

(b) more than 3 months before the first 1 July on which:

(i) if the credit provider is a member of a banking group—the head company of the group is an eligible licensee; or

(ii) otherwise—the credit provider is an eligible licensee.

Note: Paragraph (b) is included to deal with the case where the first 1 July is in 2023 or a later year.

(4) Despite paragraph (1)(e), mandatory credit information does not include default information (within the meaning of the Privacy Act 1988) that comes into existence before the first 1 July on which:

(a) if the credit provider is a member of a banking group—the head company of the group is an eligible licensee; or

(b) otherwise—the credit provider is an eligible licensee.

133CQ Meaning of supply requirements

(1) Information is supplied in accordance with the supply requirements if the supply is in accordance with:

(a) the registered CR code (within the meaning of the Privacy Act 1988); and

(b) any determination under subsection (2); and

(2) For one or more kinds of information to be supplied under this Part, ASIC may, by legislative instrument, determine particulars of the information that must be included in the supply.

(3) Despite subsection 14(2) of the Legislation Act 2003, a determination under subsection (2) may make provision in relation to a matter by applying, adopting or incorporating, with or without modification, any matter contained in any other instrument or writing as in force or existing from time to time.

(4) ASIC may, in writing, approve technical standards for supplying one or more kinds of information under this Part.

(5) If there is an inconsistency between:

(a) the registered CR code (within the meaning of the Privacy Act 1988); and

(b) a determination under subsection (2) or a technical standard approved under subsection (4);

the registered CR code prevails to the extent of the inconsistency.

Division 2—Supplying credit information to credit reporting bodies etc.

Subdivision A—Initial bulk supplies of credit information

133CR Requirement to supply

First bulk supply for at least 50% of total eligible credit accounts

(1) An eligible licensee must supply mandatory credit information for the accounts referred to in subsection (2) to each eligible credit reporting body (CRB) for the licensee:

(a) before the end of the later of the following periods:

(i) the 90‑day period starting on the first 1 July on which the licensee is an eligible licensee;

(ii) if subsection (5) applies—the 14‑day period starting on the cessation day referred to in that subsection; and

(b) in accordance with the supply requirements; and

Civil penalty: 5,000 penalty units.

(2) For the purposes of subsection (1), the accounts are at least 50% of all of the eligible credit accounts held:

(a) on the first 1 July on which the licensee is an eligible licensee; and

(b) with the licensee, or with a member of a banking group of which the licensee is the head company.

The licensee may choose which eligible credit accounts make up this 50%.

Bulk supply for remaining eligible credit accounts

(3) An eligible licensee must supply mandatory credit information for the accounts referred to in subsection (4) to each eligible credit reporting body (CRB) for the licensee:

(a) before the end of the latest of the following periods:

(i) the 90‑day period starting on the second 1 July on which the licensee is an eligible licensee;

(ii) if subsection (5) applies—the 14‑day period starting on the cessation day referred to in that subsection;

(iii) if, because paragraph 133CS(1)(b) is no longer satisfied, subsection 133CS(1) ceases to provide the licensee with an exception to this subsection for the CRB—the 14‑day period starting on the day that exception ceases to apply; and

(b) in accordance with the supply requirements; and

Civil penalty: 5,000 penalty units.

(4) For the purposes of subsection (3), the accounts are all of the eligible credit accounts held:

(a) on the second 1 July on which the licensee is an eligible licensee; and

(b) with the licensee, or with a member of a banking group of which the licensee is the head company;

for which mandatory credit information was not supplied under subsection (1) to the CRB.

Possible extension of time if credit reporting body later complies with information security requirements before end of 90‑day period

(5) For the purposes of subsection (1) or (3), this subsection applies if:

(a) the licensee reasonably believes that the CRB is not complying with section 20Q of the Privacy Act 1988 on the 1 July referred to in that subsection; and

(b) the licensee complies with paragraphs 133CS(2)(a) and (b) in relation to that belief; and

(c) the licensee ceases to hold that belief on a day (the cessation day) before the end of the 90‑day period starting on that 1 July.

Requirements apply whether the information is kept in or outside this jurisdiction

(6) Subsection (1) or (3) applies whether the mandatory credit information is kept in or outside this jurisdiction.

133CS Exception if credit reporting body not complying with information security requirements

(1) Subsection 133CR(1) or (3) does not apply, and is taken never to have applied, to a licensee for a credit reporting body if:

(a) the licensee reasonably believes that the body is not complying with section 20Q of the Privacy Act 1988:

(i) on the 1 July referred to in that subsection; and

(ii) on the last day of the 90‑day period starting on that 1 July; and

(b) in the case of subsection 133CR(3)—the licensee continues to hold that belief after that 90‑day period; and

Note 1: Paragraph (b) means that, if the licensee ceases to hold that belief after the 90‑day period starting on the 1 July in subsection 133CR(3), this exception will cease to apply and the supply requirement in subsection 133CR(3) will apply.

Note 2: A person who wishes to rely on this subsection bears an evidential burden in relation to the matters in this subsection (see subsection (3) of this section and subsection 13.3(3) of the Criminal Code).

(2) The licensee satisfies this subsection if:

(a) the licensee prepares a written notice:

(i) stating that the licensee reasonably believes that the credit reporting body is not complying with section 20Q of the Privacy Act 1988 on that 1 July; and

(ii) setting out the licensee’s reasons for that belief; and

(iii) stating that the body may try to convince the licensee otherwise, but that in the case of subsection 133CR(1) the body will need to do so before the end of the 90‑day period starting on that 1 July; and

(b) the licensee gives that notice to the body, and a copy to the Information Commissioner and ASIC, within 7 days after that 1 July; and

(i) stating that the licensee reasonably believes that the body is not complying with section 20Q of the Privacy Act 1988 on the last day of that 90‑day period; and

(ii) setting out the licensee’s reasons for that belief; and

(d) the licensee gives the final notice to the body, and a copy to the Information Commissioner and ASIC, within 7 days after the last day of that 90‑day period.

(3) A licensee who wishes to rely on subsection (1) in proceedings for a declaration of contravention or a pecuniary penalty order bears an evidential burden in relation to the matters in that subsection.

133CT Licensee must give notice if credit reporting body later complies with information security requirements

If:

(a) an eligible licensee reasonably believes that an eligible credit reporting body for the licensee is not complying with section 20Q of the Privacy Act 1988 on the first or second 1 July on which the licensee is an eligible licensee; and

(b) the licensee complies with paragraphs 133CS(2)(a) and (b) in relation to that belief; and

(i) in the case of subsection 133CR(1)—on a day during the 90‑day period starting on that first 1 July; or

(ii) in the case of subsection 133CR(3)—on any day after that second 1 July;

the licensee must:

(d) prepare a written notice:

(i) stating that the licensee has ceased to hold that belief; and

(ii) setting out the licensee’s reasons for ceasing to hold that belief; and

(e) give that notice to the body, and a copy to the Information Commissioner and ASIC, within 7 days after the day the licensee ceases to hold that belief.

Civil penalty: 5,000 penalty units.

Subdivision B—Ongoing supplies of credit information

133CU Requirement to supply

(1) If:

(a) a licensee has supplied a credit reporting body (the CRB) with mandatory credit information under this Division; and

(b) on a later day (the trigger day):

(i) the conditions (if any) prescribed by the regulations are not met for the licensee and the CRB; and

(ii) the licensee, or a member of a banking group of which the licensee is the head company, would reasonably be expected to have become aware that an event in an item of the following table has happened; and

(iii) the licensee is still an eligible licensee; and

(iv) an agreement of the kind referred to in paragraph 20Q(2)(a) of the Privacy Act 1988 is in force between the CRB and a body referred to in subparagraph (ii) of this paragraph;

the licensee must supply to the CRB the information referred to in that table item:

(i) the 45‑day period starting on the trigger day;

(ii) if subsection (2) applies—the 14‑day period starting on the cessation day referred to in that subsection;

(iii) if, because paragraph 133CV(1)(b) is no longer satisfied, subsection 133CV(1) ceases to provide the licensee with an exception to this subsection for the CRB—the 14‑day period starting on the day that exception ceases to apply;

(iv) if the trigger day happens because of table item 3 and is before the licensee supplies the CRB with mandatory credit information under subsection 133CR(3)—the 90‑day period starting on the trigger day; and

(d) in accordance with the supply requirements; and

(e) to the extent that the licensee is not prevented by the Privacy Act 1988 from doing so.

Ongoing supplies of mandatory credit information
Item	If this event happens:	This information must be supplied:
1	the need to correct any mandatory credit information the licensee has supplied under this Division to ensure that, having regard to a purpose for which the information is held by: (a) the licensee; or (b) a member of a banking group of which the licensee is the head company; the information is accurate, up‑to‑date, complete, relevant and not misleading	details of the corrected information
2	the payment of an overdue payment about which default information (within the meaning of the Privacy Act 1988) has been supplied under this Division	payment information (within the meaning of the Privacy Act 1988) relating to the payment
3	the opening of an eligible credit account with: (a) the licensee; or (b) a member of a banking group of which the licensee is the head company; provided this happens after the second 1 July on which the licensee is an eligible licensee	mandatory credit information for that account
4	financial hardship information comes into existence for an eligible credit account on or after the later of: (a) 1 July 2022; and (b) the day after the first day mandatory credit information for the account is supplied by the licensee to the CRB under this Division	the financial hardship information
5	default information (within the meaning of the Privacy Act 1988) comes into existence for an eligible credit account for which mandatory credit information has previously been supplied by the licensee to the CRB under this Division	the default information
6	an event: (a) of a kind prescribed by the regulations; and (b) that relates to eligible credit accounts or to the natural persons who hold those accounts	information that: (a) is, or relates to, mandatory credit information; and (b) is of a kind prescribed by the regulations for that kind of event

Civil penalty: 5,000 penalty units.

(2) For the purposes of subparagraph (1)(c)(ii), this subsection applies if:

(a) the licensee reasonably believes that the CRB is not complying with section 20Q of the Privacy Act 1988 on the trigger day; and

(b) the licensee complies with paragraphs 133CV(2)(a) and (b) in relation to that belief; and

(c) the licensee ceases to hold that belief on a day (the cessation day) before the end of the 45‑day period starting on the trigger day.

(3) Supplies under subsection (1) of information relating to multiple events, or multiple trigger days, may be made together.

(4) Subsection (1) applies whether the information referred to in the table is kept in or outside this jurisdiction.

(5) Regulations made for the purposes of subparagraph (1)(b)(i) may make provision in relation to a matter by applying, adopting or incorporating, with or without modification, any matter contained in any other instrument or writing as in force or existing from time to time.

(6) Subsection (5) has effect despite subsection 14(2) of the Legislation Act 2003.

133CV Exception if credit reporting body not complying with information security requirements

(1) Subsection 133CU(1) does not apply, and is taken never to have applied, to a licensee for a credit reporting body if:

(a) the licensee reasonably believes that the body is not complying with section 20Q of the Privacy Act 1988:

(i) on the trigger day referred to in that subsection; and

(ii) on the last day of the 45‑day period starting on the trigger day; and

(b) the licensee continues to hold that belief after that 45‑day period; and

Note 1: Paragraph (b) means that, if the licensee ceases to hold that belief after that 45‑day period, this exception will cease to apply and the supply requirement in subsection 133CU(1) will apply.

(2) The licensee satisfies this subsection if:

(a) the licensee prepares a written notice:

(i) stating that the licensee reasonably believes that the body is not complying with section 20Q of the Privacy Act 1988 on the trigger day; and

(ii) setting out the licensee’s reasons for that belief; and

(iii) stating that the body may try to convince the licensee otherwise; and

(b) the licensee gives that notice to the body, and a copy to the Information Commissioner and ASIC, within 7 days after the trigger day; and

(i) stating that the licensee reasonably believes that the body is not complying with section 20Q of the Privacy Act 1988 on the last day of that 45‑day period; and

(ii) setting out the licensee’s reasons for that belief; and

(d) the licensee gives the final notice to the body, and a copy to the Information Commissioner and ASIC, within 7 days after the last day of that 45‑day period.

(4) Subsection 21U(2) of the Privacy Act 1988 does not require a licensee to give a credit reporting body notice of a correction of certain information if:

(a) subsection (1) of this section is providing the licensee with an exception from a requirement under subsection 133CU(1) of this Act; and

(b) that requirement is to supply the corrected information to the body;

unless the reason under subsection 21U(1) of the Privacy Act 1988 for the correction is that the information is inaccurate, and it was inaccurate when earlier supplied to the body under this Division.

133CW Licensee must give notice if credit reporting body later complies with information security requirements

If:

(a) an eligible licensee reasonably believes that an eligible credit reporting body for the licensee is not complying with section 20Q of the Privacy Act 1988 on the trigger day referred to in subsection 133CU(1); and

(b) the licensee complies with paragraphs 133CV(2)(a) and (b) in relation to that belief; and

the licensee must:

(d) prepare a written notice:

(i) stating that the licensee has ceased to hold that belief; and

(ii) setting out the licensee’s reasons for ceasing to hold that belief; and

(e) give that notice to the body, and a copy to the Information Commissioner and ASIC, within 7 days after the day the licensee ceased to hold that belief.

Civil penalty: 5,000 penalty units.

Subdivision C—Offences

133CX Offence relating to initial bulk supplies

(1) A person commits an offence if:

(a) the person is subject to a requirement under subsection 133CR(1) or (3); and

(b) the person engages in conduct; and

Criminal penalty: 100 penalty units.

(2) Section 14.1 of the Criminal Code does not apply to an offence against subsection (1).

Note: For an exception to an offence against subsection (1), see subsection 133CS(1). A defendant bears an evidential burden in relation to the matters in subsection 133CS(1) (see subsection 13.3(3) of the Criminal Code).

133CY Offence relating to ongoing supplies

(1) A person commits an offence if:

(a) the person is subject to a requirement under subsection 133CU(1); and

(b) the person engages in conduct; and

Criminal penalty: 100 penalty units.

(2) Section 14.1 of the Criminal Code does not apply to an offence against subsection (1).

Note: For an exception to an offence against subsection (1), see subsection 133CV(1). A defendant bears an evidential burden in relation to the matters in subsection 133CV(1) (see subsection 13.3(3) of the Criminal Code).

133CZ Offence relating to giving notice if credit reporting body later complies with information security requirements

A person commits an offence if:

(a) the person is subject to a requirement under section 133CT or 133CW; and

(b) the person engages in conduct; and

Criminal penalty: 100 penalty units.

Division 3—Conditions on credit reporting bodies on‑disclosing credit information

133CZA On‑disclosing information supplied under Division 2 etc.

(1) This section applies to a credit reporting body in relation to the following information (the protected information):

(a) any information that the credit reporting body is supplied under Division 2;