Contents
Chapter 1—Introduction 1
Part 1‑1—Introduction 1
1............ Short title [see Note 1]........................................................................ 1
2............ Commencement................................................................................... 1
3............ The National Credit Code.................................................................... 2
Part 1‑2—Definitions 3
Division 1—Introduction 3
4............ Guide to this Part................................................................................ 3
Division 2—The Dictionary 4
5............ The Dictionary.................................................................................... 4
Division 3—Definitions relating to the meaning of credit activity 15
6............ Meaning of credit activity.................................................................. 15
7............ Meaning of credit service.................................................................. 16
8............ Meaning of credit assistance............................................................ 16
9............ Meaning of acts as an intermediary................................................. 17
10.......... Assignees of credit providers, lessors, mortgagees and beneficiaries of a guarantee 17
Division 4—Other definitions 19
11.......... Meaning of approved external dispute resolution scheme................ 19
12.......... When a business is carried on in this jurisdiction............................ 19
13.......... Meaning of misleading..................................................................... 19
14.......... Meaning of person—generally includes a partnership...................... 20
15.......... Meaning of person—generally includes multiple trustees................. 20
16.......... Qualified privilege............................................................................. 22
Part 1‑3—Application of this Act and the Transitional Act 23
Division 1—Introduction 23
17.......... Guide to this Part.............................................................................. 23
Division 2—Constitutional basis and application of this Act and the Transitional Act 24
18.......... Constitutional basis for this Act and the Transitional Act................. 24
19.......... Meaning of referring State................................................................ 25
20.......... Meaning of referred credit matter.................................................... 29
21.......... General application of this Act and the Transitional Act................... 29
22.......... When Acts bind Crown.................................................................... 30
Division 3—Interaction between the Commonwealth credit legislation and State and Territory laws 31
23.......... Concurrent operation intended.......................................................... 31
24.......... When Commonwealth credit legislation does not apply.................... 31
25.......... Avoiding direct inconsistency between Commonwealth and State and Territory laws 32
26.......... Regulations to deal with interaction between laws............................ 33
Chapter 2—Licensing of persons who engage in credit activities 35
Part 2‑1—Requirement to be licensed to engage in credit activities 35
Division 1—Introduction 35
27.......... Guide to this Part.............................................................................. 35
Division 2—Engaging in credit activities without a licence 36
28.......... Application of this Division.............................................................. 36
29.......... Prohibition on engaging in credit activities without a licence............ 36
Division 3—Other prohibitions relating to the requirement to be licensed and to credit activities 38
30.......... Prohibitions on holding out and advertising etc................................ 38
31.......... Prohibition on conducting business with unlicensed persons........... 39
32.......... Prohibition on charging a fee etc....................................................... 39
33.......... Prohibition on giving misleading information etc.............................. 40
Part 2‑2—Australian credit licences 41
Division 1—Introduction 41
34.......... Guide to this Part.............................................................................. 41
Division 2—Australian credit licences 42
35.......... Australian credit licences................................................................... 42
Division 3—How to get an Australian credit licence 43
36.......... Applying for a licence....................................................................... 43
37.......... When a licence may be granted—applicants other than ADIs........... 43
38.......... When a licence may be granted—ADIs............................................ 45
39.......... Regulations may prescribe streamlined process for other applicants. 46
40.......... Licences must not be granted to certain applicants............................ 46
41.......... Applicant must be given hearing before refusal of licence................ 46
42.......... Notice of grant or refusal of licence and date of effect...................... 47
43.......... Australian credit licence numbers...................................................... 47
44.......... Basis on which licence is granted...................................................... 47
Division 4—Conditions on an Australian credit licence 49
45.......... The conditions on the licence............................................................ 49
46.......... Licence conditions—special procedures for APRA‑regulated bodies 50
Division 5—Obligations of licensees 52
47.......... General conduct obligations of licensees........................................... 52
48.......... Requirements for compensation arrangements.................................. 53
49.......... Obligation to provide a statement or obtain an audit report if directed by ASIC 54
50.......... Obligation to give ASIC information required by the regulations..... 56
51.......... Obligation to provide ASIC with assistance if reasonably requested 57
52.......... Obligation to cite Australian credit licence number........................... 57
53.......... Obligation to lodge annual compliance certificate.............................. 58
Division 6—When a licence can be suspended, cancelled or varied 60
Subdivision A—Suspensions and cancellations 60
54.......... Suspension or cancellation without hearing...................................... 60
55.......... Suspension or cancellation after offering a hearing........................... 61
56.......... Suspension and cancellation—special procedures for APRA‑regulated bodies 62
Subdivision B—Variations 63
57.......... Varying licences................................................................................ 63
Subdivision C—Miscellaneous rules about suspensions, cancellations and variations 63
58.......... Effect of suspension.......................................................................... 63
59.......... Revocation of suspension................................................................. 63
60.......... Date of effect, notice and publication of variation, cancellation or suspension etc. 63
61.......... Statement of reasons......................................................................... 64
62.......... ASIC may allow licence to continue in force.................................... 64
Part 2‑3—Credit representatives and other representatives of licensees 65
Division 1—Introduction 65
63.......... Guide to this Part.............................................................................. 65
Division 2—Authorisation of credit representatives 66
64.......... Licensee may authorise credit representatives................................... 66
65.......... Credit representative that is a body corporate may sub‑authorise natural persons as credit representatives 67
66.......... Credit representative of 2 or more licensees...................................... 68
67.......... A person cannot be a credit representative in relation to credit activities authorised by a person’s licence 69
68.......... Variation and revocation of authorisations and sub‑authorisations... 69
69.......... Obligation not to give authorisation that has no effect....................... 70
70.......... Obligation to vary or revoke authorisation that ceases to have effect 70
71.......... Obligation to notify ASIC etc. about credit representatives............... 71
72.......... Credit representative numbers........................................................... 73
Division 3—Information about representatives 74
73.......... ASIC may give licensee information about representatives............... 74
Division 4—Liability of licensees for representatives 77
74.......... Application of this Division.............................................................. 77
75.......... Responsibility if representative of only one licensee......................... 77
76.......... Representatives of multiple licensees................................................ 77
77.......... Responsibility extends to loss or damage suffered by client............. 78
78.......... Effect of this Division....................................................................... 78
Part 2‑4—Banning or disqualification of persons from engaging in credit activities 80
Division 1—Introduction 80
79.......... Guide to this Part.............................................................................. 80
Division 2—Banning orders 81
80.......... ASIC’s power to make a banning order............................................ 81
81.......... What is a banning order?.................................................................. 82
82.......... Effect of banning orders.................................................................... 83
83.......... Variation or cancellation of banning orders....................................... 83
84.......... Date of effect, notice and publication of banning order, variation or cancellation 84
85.......... Statement of reasons......................................................................... 85
Division 3—Disqualification by the court 86
86.......... Disqualification by the court............................................................. 86
Part 2‑5—Financial records, trust accounts and audit reports 87
Division 1—Introduction 87
87.......... Guide to this Part.............................................................................. 87
Division 2—Financial records of licensees 88
88.......... Obligation to keep financial records.................................................. 88
89.......... How financial records are to be kept................................................. 89
90.......... Language of financial records........................................................... 89
91.......... Location of financial records............................................................. 89
92.......... Information to be shown in financial records.................................... 90
93.......... Regulations may impose additional requirements.............................. 90
94.......... Financial records taken to be made with licensee’s authority............ 91
95.......... Obligation to retain financial records for 7 years............................... 91
96.......... Financial records are prima facie evidence of matters........................ 91
Division 3—Trust accounts of credit service licensees 93
97.......... Application of this Division.............................................................. 93
98.......... Obligation for credit service licensees to maintain trust account........ 93
99.......... Obligations in relation to trust account money.................................. 94
100........ Obligation to lodge trust account statement and trust account audit report 95
101........ Time of lodgment of trust account statement and trust account audit report 96
Division 4—Matters relating to audit reports 98
102........ Auditor’s right of access to records, information etc......................... 98
103........ Auditor’s fees and expenses............................................................. 99
104........ Auditor to report on certain matters................................................... 99
105........ Qualified privilege for auditor etc.................................................... 100
106........ Regulations in relation to audit reports etc....................................... 101
Part 2‑6—Exemptions and modifications relating to this Chapter 102
Division 1—Introduction 102
107........ Guide to this Part............................................................................ 102
Division 2—Exemptions and modifications relating to this Chapter 103
108........ Provisions to which this Part applies.............................................. 103
109........ Exemptions and modifications by ASIC......................................... 103
110........ Exemptions and modifications by the regulations........................... 105
Chapter 3—Responsible lending conduct 106
Part 3‑1—Licensees that provide credit assistance in relation to credit contracts 106
Division 1—Introduction 106
111........ Guide to this Part............................................................................ 106
112........ Application of this Part................................................................... 107
Division 2—Credit guide of credit assistance providers 108
113........ Credit guide of credit assistance providers...................................... 108
Division 3—Quote for providing credit assistance etc. in relation to credit contracts 111
114........ Quote for providing credit assistance etc......................................... 111
Division 4—Obligations of credit assistance providers before providing credit assistance for credit contracts 113
115........ Obligations of credit assistance providers before providing credit assistance for credit contracts 113
116........ Preliminary assessment of unsuitability of the credit contract......... 114
117........ Reasonable inquiries etc. about the consumer................................. 114
118........ When the credit contract must be assessed as unsuitable—entering contract or increasing the credit limit 115
119........ When the credit contract must be assessed as unsuitable—remaining in credit contract 116
120........ Providing the consumer with the preliminary assessment............... 117
Division 5—Fees, commissions etc. relating to credit contracts 119
121........ Fees, commissions etc. relating to credit contracts.......................... 119
122........ No profiting from fees etc. paid to third parties............................... 120
Division 6—Prohibition on suggesting, or assisting with, unsuitable credit contracts 121
123........ Prohibition on suggesting or assisting consumers to enter, or increase the credit limit under, unsuitable credit contracts........................................................................................................ 121
124........ Prohibition on suggesting to consumers to remain in unsuitable credit contracts 122
Part 3‑2—Licensees that are credit providers under credit contracts 125
Division 1—Introduction 125
125........ Guide to this Part............................................................................ 125
Division 2—Credit guide of credit providers 126
126........ Credit guide of credit providers....................................................... 126
127........ Credit guide of credit providers who are assignees......................... 127
Division 3—Obligations of credit providers before entering credit contracts or increasing credit limits 129
128........ Obligations of credit providers before entering credit contracts or increasing credit limits 129
129........ Assessment of unsuitability of the credit contract........................... 129
130........ Reasonable inquiries etc. about the consumer................................. 129
131........ When credit contract must be assessed as unsuitable...................... 130
132........ Giving the consumer the assessment............................................... 131
Division 4—Prohibition on entering, or increasing the credit limit of, unsuitable credit contracts 133
133........ Prohibition on entering, or increasing the credit limit of, unsuitable credit contracts 133
Part 3‑3—Licensees that provide credit assistance in relation to consumer leases 135
Division 1—Introduction 135
134........ Guide to this Part............................................................................ 135
135........ Application of this Part................................................................... 136
Division 2—Credit guide of credit assistance providers 137
136........ Credit guide of credit assistance providers...................................... 137
Division 3—Quote for providing credit assistance etc. in relation to consumer leases 140
137........ Quote for providing credit assistance etc......................................... 140
Division 4—Obligations of credit assistance providers before providing credit assistance for consumer leases 142
138........ Obligations of credit assistance providers before providing credit assistance for consumer leases 142
139........ Preliminary assessment of unsuitability of the consumer lease....... 143
140........ Reasonable inquiries etc. about the consumer................................. 143
141........ When the consumer lease must be assessed as unsuitable—entering lease 144
142........ When the consumer lease must be assessed as unsuitable—remaining in lease 145
143........ Providing the consumer with the preliminary assessment............... 146
Division 5—Fees, commissions etc. relating to consumer leases 148
144........ Fees, commissions etc. relating to consumer leases........................ 148
145........ No profiting from fees etc. paid to third parties............................... 149
Division 6—Prohibition on suggesting, or assisting with, unsuitable consumer leases 150
146........ Prohibition on suggesting, or assisting with, unsuitable consumer leases 150
147........ Prohibition on suggesting to consumers to remain in unsuitable consumer leases 151
Part 3‑4—Licensees that are lessors under consumer leases 154
Division 1—Introduction 154
148........ Guide to this Part............................................................................ 154
Division 2—Credit guide of lessors 155
149........ Credit guide of lessors.................................................................... 155
150........ Credit guide of lessors who are assignees....................................... 156
Division 3—Obligations of lessors before entering consumer leases 158
151........ Obligations of lessors before entering consumer leases.................. 158
152........ Assessment of unsuitability of the consumer lease......................... 158
153........ Reasonable inquiries etc. about the consumer................................. 158
154........ When consumer lease must be assessed as unsuitable.................... 159
155........ Giving the consumer the assessment............................................... 160
Division 4—Prohibition on entering unsuitable consumer leases 162
156........ Prohibition on entering unsuitable consumer leases........................ 162
Part 3‑5—Credit representatives 164
Division 1—Introduction 164
157........ Guide to this Part............................................................................ 164
Division 2—Credit guide of credit representatives 165
158........ Credit guide of credit representatives.............................................. 165
Part 3‑6—Debt collectors 168
Division 1—Introduction 168
159........ Guide to this Part............................................................................ 168
Division 2—Credit guide of debt collectors 169
160........ Credit guide of debt collectors......................................................... 169
Part 3‑7—Exemptions and modifications relating to this Chapter 171
Division 1—Introduction 171
161........ Guide to this Part............................................................................ 171
Division 2—Exemptions and modifications relating to this Chapter 172
162........ Provisions to which this Part applies.............................................. 172
163........ Exemptions and modifications by ASIC......................................... 172
164........ Exemptions and modifications by the regulations........................... 173
Chapter 4—Remedies 174
Part 4‑1—Civil penalty provisions 174
Division 1—Introduction 174
165........ Guide to this Part............................................................................ 174
Division 2—Declarations and pecuniary penalty orders for contraventions of civil penalty provisions 175
166........ Declaration of contravention of civil penalty provision................... 175
167........ Court may order person to pay pecuniary penalty for contravening civil penalty provision 175
Division 3—General provisions relating to civil penalty provisions 177
168........ Contravening a civil penalty provision is not an offence................. 177
169........ Involvement in contravention treated in same way as actual contravention 177
170........ Civil evidence and procedure rules for proceedings relating to civil penalty provisions 177
171........ Criminal proceedings before civil proceedings................................ 177
172........ Criminal proceedings during civil proceedings............................... 177
173........ Criminal proceedings after civil proceedings................................... 178
174........ Evidence given in proceedings for pecuniary penalty not admissible in criminal proceedings 178
175........ Civil double jeopardy...................................................................... 178
Part 4‑2—Power of the court to grant remedies 179
Division 1—Introduction 179
176........ Guide to this Part............................................................................ 179
Division 2—Power of the court to grant remedies 180
177........ Injunctions...................................................................................... 180
178........ Compensation orders...................................................................... 181
179........ Other orders to compensate loss or damage.................................... 182
180........ Orders in relation to unlawful credit activities................................. 184
181........ Preference must be given to compensate consumers....................... 185
182........ Adverse publicity orders................................................................. 186
183........ Relief from liability for contravention of civil penalty provision..... 186
184........ Multiple remedies may be granted................................................... 187
Part 4‑3—Jurisdiction and procedure of courts 188
Division 1—Introduction 188
185........ Guide to this Part............................................................................ 188
Division 2—Civil proceedings 189
Subdivision A—Application of this Division 189
186........ Application of this Division............................................................ 189
Subdivision B—Conferral of civil jurisdiction 189
187........ Civil jurisdiction of courts............................................................... 189
188........ Jurisdiction—decisions to prosecute and related criminal justice process decisions made by Commonwealth officers........................................................................................................ 190
189........ Cross‑jurisdictional appeals............................................................ 192
190........ Courts to act in aid of each other..................................................... 192
Subdivision C—Transfers between courts 193
191........ Transfers—application of Subdivision............................................ 193
192........ Transfers—exercise of transfer power............................................ 193
193........ Transfers—criteria for transfer........................................................ 194
194........ Transfers—how initiated................................................................. 195
195........ Transfers—documents and procedure............................................. 195
196........ Transfers—conduct of proceedings................................................ 195
197........ Transfers—entitlement to practise as a lawyer................................ 196
198........ Transfers—limitation on appeals..................................................... 196
Subdivision D—Other matters 196
199........ Plaintiffs may choose small claims procedure................................. 196
200........ Costs only if proceedings brought vexatiously etc.......................... 200
201........ Civil proceedings not to be stayed................................................... 201
202........ Standard of proof in civil proceedings............................................ 201
Division 3—Criminal proceedings 202
Subdivision A—Application of this Division 202
203........ Application of this Division............................................................ 202
Subdivision B—Conferral of criminal jurisdiction 202
204........ Criminal jurisdiction of courts......................................................... 202
205........ Criminal proceedings—laws to be applied...................................... 205
206........ Criminal proceedings—how taken.................................................. 205
207........ Certain persons to assist in prosecutions......................................... 206
208........ Privilege against self‑incrimination not available to bodies corporate in criminal proceedings 207
Division 4—Proceedings generally 208
209........ ASIC’s power to intervene in proceedings..................................... 208
210........ Evidence of contravention............................................................... 208
211........ Power of court to punish for contempt of court.............................. 209
Chapter 5—Administration 210
Part 5‑1—Registers relating to credit activities 210
Division 1—Introduction 210
212........ Guide to this Part............................................................................ 210
Division 2—Registers relating to credit activities 211
213........ Credit registers................................................................................ 211
214........ Inspection and public availability of credit registers........................ 212
Part 5‑2—Documents lodged with ASIC or required by this Act 213
Division 1—Introduction 213
215........ Guide to this Part............................................................................ 213
Division 2—Lodgment of documents with ASIC 214
216........ When documents are lodged with ASIC......................................... 214
217........ Approved forms for documents to be lodged with ASIC............... 214
218........ ASIC may refuse to receive document etc....................................... 215
Division 3—ASIC’s register of documents 217
219........ Register of documents lodged with ASIC....................................... 217
220........ ASIC may require person to give information for document registers 217
221........ Written document setting out information from document registers is prima facie evidence of matters 218
Division 4—Other provisions relating to documents lodged with ASIC or required under this Act 219
222........ Certified copy or extract of document lodged with ASIC is admissible in evidence 219
223........ ASIC may destroy or dispose of certain documents....................... 219
224........ Court may order lodgment of document etc.................................... 219
225........ Offences relating to documents lodged with ASIC etc.................... 220
Part 5‑3—Concealment or falsification of credit books 223
Division 1—Introduction 223
226........ Guide to this Part............................................................................ 223
Division 2—Prohibitions relating to the concealment or falsification of credit books 224
227........ Concealing etc. of credit books....................................................... 224
228........ Falsification of credit books............................................................ 225
229........ Precautions against falsification of credit books.............................. 226
Part 5‑4—Fees imposed by the National Consumer Credit Protection (Fees) Act 2009 227
Division 1—Introduction 227
230........ Guide to this Part............................................................................ 227
Division 2—Fees imposed by the National Consumer Credit Protection (Fees) Act 2009 228
231........ Fees are payable to the Commonwealth.......................................... 228
232........ Lodgment of document without payment of fee.............................. 228
233........ Doing act without payment of fee................................................... 228
234........ Effect of sections 232 and 233........................................................ 228
235........ Waiver and refund of fees............................................................... 229
236........ Debts due to the Commonwealth.................................................... 229
237........ Payment of fee does not give right to inspect or search................... 229
Part 5‑5—Other administrative matters 230
Division 1—Introduction 230
238........ Guide to this Part............................................................................ 230
Division 2—Other administrative matters 231
239........ ASIC has general administration of this Act................................... 231
240........ Obstructing or hindering ASIC etc................................................. 231
241........ Approved codes of conduct............................................................ 231
242........ ASIC may arrange for use of computer programs to make decisions 232
243........ Qualified privilege for information given to ASIC.......................... 233
244........ ASIC certificate is prima facie evidence of matters......................... 233
245........ Operator of approved external dispute resolution scheme may give information to ASIC 234
Chapter 6—Compliance and enforcement 235
Part 6‑1—Investigations 235
Division 1—Introduction 235
246........ Guide to this Part............................................................................ 235
Division 2—Investigations 236
247........ General powers of investigation...................................................... 236
248........ Minister may direct investigations................................................... 236
249........ Interim report on investigation........................................................ 237
250........ Final report on investigation............................................................ 238
251........ Distribution of report...................................................................... 238
Part 6‑2—Examination of persons 240
Division 1—Introduction 240
252........ Guide to this Part............................................................................ 240
Division 2—Examination of persons 241
253........ Notice requiring appearance for examination.................................. 241
254........ Proceedings at examination............................................................. 241
255........ Requirements made of examinee..................................................... 241
256........ Examination to take place in private................................................ 242
257........ Examinee’s lawyer may attend........................................................ 242
258........ Record of examination.................................................................... 243
259........ Giving to other persons copies of record........................................ 243
260........ Copies given subject to conditions.................................................. 244
261........ Record to accompany report............................................................ 244
Part 6‑3—Inspection of books and audit information‑gathering powers 245
Division 1—Introduction 245
262........ Guide to this Part............................................................................ 245
Division 2—Inspection of books and audit information‑gathering powers 246
263........ When certain powers may be exercised........................................... 246
264........ ASIC may inspect books without charge........................................ 246
265........ Notice to auditors concerning information and books..................... 247
266........ Notice to produce books about credit activities............................... 248
267........ Notice to produce documents in person’s possession..................... 248
268........ ASIC may authorise persons to require production of books, giving of information etc. 249
269........ Application for warrant to seize books not produced...................... 250
270........ Grant of warrant.............................................................................. 250
271........ Powers if books produced or seized............................................... 251
272........ Powers if books not produced........................................................ 252
Part 6‑4—Proceedings after an investigation 254
Division 1—Introduction 254
273........ Guide to this Part............................................................................ 254
Division 2—Proceedings after an investigation 255
274........ ASIC may prosecute....................................................................... 255
275........ ASIC may bring civil proceedings.................................................. 256
Part 6‑5—Hearings 257
Division 1—Introduction 257
276........ Guide to this Part............................................................................ 257
Division 2—Hearings 258
277........ Power to hold hearings................................................................... 258
278........ General discretion to hold hearing in public or private.................... 258
279........ Request by person appearing at hearing that it take place in public. 258
280........ Certain hearings to take place in private.......................................... 259
281........ ASIC may restrict publication of certain material............................ 259
282........ Who may be present when hearing takes place in private................ 259
283........ Involvement of person entitled to appear at hearing........................ 260
284........ Power to summon witnesses and take evidence.............................. 261
285........ Proceedings at hearings................................................................... 262
286........ ASIC to take account of evidence and submissions........................ 262
287........ Reference to court of question of law arising at hearing.................. 263
288........ Protection of ASIC members etc..................................................... 263
Part 6‑6—Offences 264
Division 1—Introduction 264
289........ Guide to this Part............................................................................ 264
Division 2—Offences 265
290........ Contraventions of requirements made under this Chapter............... 265
291........ False information............................................................................ 266
292........ Obstructing person executing a warrant under this Chapter............ 266
293........ Disrupting hearings......................................................................... 267
294........ Concealing books relevant to investigation..................................... 267
295........ Self‑incrimination............................................................................ 268
296........ Legal professional privilege............................................................ 269
297........ Powers of court relating to contraventions of this Chapter.............. 270
Part 6‑7—ASIC’s powers in relation to contraventions of this Chapter 271
Division 1—Introduction 271
298........ Guide to this Part............................................................................ 271
Division 2—ASIC’s powers in relation to contraventions of this Chapter 272
299........ Application of this Part................................................................... 272
300........ Orders by ASIC relating to credit contracts, mortgages, guarantees or consumer leases 272
301........ Orders under this Part..................................................................... 273
Part 6‑8—Evidentiary use of certain material 274
Division 1—Introduction 274
302........ Guide to this Part............................................................................ 274
Division 2—Evidentiary use of certain material 275
303........ Statements made at an examination: proceedings against examinee. 275
304........ Statements made at an examination: other proceedings................... 275
305........ Weight of evidence admitted under section 304.............................. 276
306........ Objection to admission of statements made at examination............. 277
307........ Copies of, or extracts from, certain books....................................... 278
308........ Report under Part 6‑1...................................................................... 278
309........ Exceptions to admissibility of report............................................... 279
310........ Material otherwise admissible......................................................... 280
Part 6‑9—Miscellaneous provisions relating to compliance and enforcement 281
Division 1—Introduction 281
311........ Guide to this Part............................................................................ 281
Division 2—Miscellaneous provisions relating to compliance and enforcement 282
312........ Requirement made of a body corporate........................................... 282
313........ Evidence of authority...................................................................... 282
314........ Giving documents to natural persons.............................................. 282
315........ Place and time for production of books........................................... 283
316........ Application of Crimes Act and Evidence Act.................................. 283
317........ Allowances and expenses............................................................... 283
318........ Expenses of investigation under Part 6‑1........................................ 283
319........ Recovery of expenses of investigation............................................ 284
320........ Compliance with this Chapter......................................................... 285
321........ Effect of this Chapter...................................................................... 285
322........ Enforcement of undertakings.......................................................... 285
Chapter 7—Miscellaneous 286
Part 7‑1—Miscellaneous 286
Division 1—Introduction 286
323........ Guide to this Part............................................................................ 286
Division 2—Liability of persons for conduct of their agents etc. 287
324........ Liability for bodies corporate for conduct of their agents, employees etc. 287
325........ Liability of persons (other than bodies corporate) for the conduct of their agents, employees etc. 288
326........ Regulations for the purposes of this Division................................. 289
Division 3—Review of ASIC’s decisions 290
327........ Review by Administrative Appeals Tribunal of decisions by ASIC under this Act 290
328........ Notice of reviewable decision and review rights............................. 291
Division 4—Regulations 292
329........ Regulations..................................................................................... 292
330........ Regulations—where proceedings may be brought.......................... 292
331........ Regulations—infringement notices................................................. 292
Division 5—Other miscellaneous provisions 293
332........ Civil penalty provisions contravened or offences committed partly in and partly out of this jurisdiction 293
333........ Contravention of Act does not generally affect validity of transactions etc. 293
334........ Contracting out etc.......................................................................... 293
335........ Indemnities...................................................................................... 294
336........ Acquisition of property................................................................... 295
337........ Minister may delegate prescribed functions and powers under this Act 295
Schedule 1—National Credit Code 296
Part 1—Preliminary 296
1............ Short title......................................................................................... 296
2............ Interpretation generally.................................................................... 296
3............ Meaning of credit and amount of credit.......................................... 296
4............ Meaning of credit contract.............................................................. 297
5............ Provision of credit to which this Code applies................................ 297
6............ Provision of credit to which this Code does not apply.................... 298
7............ Mortgages to which this Code applies............................................ 302
8............ Guarantees to which this Code applies............................................ 302
9............ Goods leases with option to purchase to be regarded as sale by instalments 302
10.......... Deciding application of Code to particular contracts for the sale of land by instalments 304
11.......... Deciding application of Code to particular contracts for the sale of goods by instalments 305
12.......... Deciding application of Code to particular contracts for the sale of goods by instalments under related contracts 306
13.......... Presumptions relating to application of Code.................................. 306
Part 2—Credit contracts 308
Division 1—Negotiating and making credit contracts 308
14.......... Credit contract to be in form of written contract document.............. 308
15.......... Other forms of contract................................................................... 308
16.......... Precontractual disclosure................................................................. 309
17.......... Matters that must be in contract document...................................... 309
18.......... Form and expression of contract document..................................... 315
19.......... Alteration of contract document...................................................... 315
20.......... Copy of contract for debtor............................................................. 315
21.......... When debtor may terminate contract............................................... 315
22.......... Offence for noncompliance............................................................. 316
Division 2—Debtor’s monetary obligations 317
23.......... Prohibited monetary obligations...................................................... 317
24.......... Offences related to prohibited monetary obligations....................... 317
25.......... Loan to be in money or equivalent.................................................. 318
26.......... Early payments and crediting of payments...................................... 318
26A....... Regulations about residential investment property.......................... 319
Division 3—Interest charges 320
27.......... Definitions relating to interest......................................................... 320
28.......... Limit on interest charges................................................................. 320
29.......... Early debit or payment of interest charges prohibited...................... 321
30.......... Default interest................................................................................ 321
30A....... Regulations about residential investment property.......................... 322
Division 4—Fees and charges 323
31.......... Prohibited credit fees or charges..................................................... 323
32.......... Fees or charges passed on to other parties...................................... 323
Division 5—Credit provider’s obligation to account 324
33.......... Statements of account...................................................................... 324
34.......... Information to be contained in statements of account...................... 325
35.......... Opening balance must not exceed closing balance of previous statement 327
36.......... Statement of amount owing and other matters................................. 328
37.......... Court may order statement to be provided....................................... 329
38.......... Disputed accounts........................................................................... 329
39.......... Dating and adjustment of debits and credits in accounts................. 330
Division 6—Certain transactions not to be treated as contracts 331
40.......... Deferrals, waivers and changes under contracts.............................. 331
Part 3—Related mortgages and guarantees 332
Division 1—Mortgages 332
41.......... Application of Division................................................................... 332
42.......... Form of mortgage........................................................................... 332
43.......... Copy of mortgage for mortgagor.................................................... 332
44.......... Mortgages over all property void.................................................... 333
45.......... Restriction on mortgage of future property..................................... 333
46.......... Mortgages and continuing credit contracts...................................... 333
47.......... All accounts mortgages................................................................... 333
48.......... Third party mortgages prohibited.................................................... 334
49.......... Maximum amount which may be secured....................................... 334
50.......... Prohibited securities........................................................................ 335
51.......... Assignment or disposal of mortgaged property by mortgagor........ 336
52.......... Conditions on consent to assignment or disposal of property subject to mortgage 337
53.......... Offence for noncompliance............................................................. 337
Division 2—Guarantees 339
54.......... Application of Division................................................................... 339
55.......... Form of guarantee........................................................................... 339
56.......... Disclosure....................................................................................... 339
57.......... Copies of documents for guarantor................................................. 339
58.......... Guarantor may withdraw before credit is provided......................... 340
59.......... Extension of guarantee.................................................................... 340
60.......... Limitation of guarantor’s liability.................................................... 341
61.......... Increase in guarantor’s liabilities..................................................... 342
62.......... Offence for noncompliance............................................................. 342
Part 4—Changes to obligations under credit contracts, mortgages and guarantees 344
Division 1—Unilateral changes by credit provider 344
63.......... Application of Division................................................................... 344
64.......... Interest rate changes........................................................................ 344
65.......... Repayment changes......................................................................... 346
66.......... Credit fees and charges changes...................................................... 347
67.......... Changes to credit limits etc. in continuing credit contracts.............. 348
68.......... Other unilateral changes by credit provider..................................... 348
69.......... Particulars of matters as changed only required to be given under this Division in certain cases 349
70.......... Prohibited increases in liabilities..................................................... 349
Division 2—Changes by agreement of parties 350
71.......... Changes by agreement.................................................................... 350
Division 3—Changes on grounds of hardship and unjust transactions 351
72.......... Changes on grounds of hardship.................................................... 351
73.......... Notice of change............................................................................. 352
74.......... Changes by court............................................................................ 353
75.......... Credit provider may apply for variation of change.......................... 353
76.......... Court may reopen unjust transactions............................................. 353
77.......... Orders on reopening of transactions............................................... 356
78.......... Court may review unconscionable interest and other charges......... 357
79.......... Applications by ASIC..................................................................... 358
80.......... Time limit........................................................................................ 358
81.......... Joinder of parties............................................................................. 358
Part 5—Ending and enforcing credit contracts, mortgages and guarantees 360
Division 1—Ending of credit contract by debtor 360
82.......... Debtor’s or guarantor’s right to pay out contract............................ 360
83.......... Statement of pay out figure............................................................. 360
84.......... Court may determine pay out figure if credit provider does not provide a pay out figure 361
85.......... Surrender of mortgaged goods and goods subject to sale by instalments 361
86.......... Compensation to debtor or mortgagor............................................. 364
87.......... One‑off notice to be given the first time a direct debit default occurs 364
Division 2—Enforcement of credit contracts, mortgages and guarantees 366
88.......... Requirements to be met before credit provider can enforce credit contract or mortgage against defaulting debtor or mortgagor........................................................................................ 366
89.......... Defaults may be remedied............................................................... 369
90.......... Requirements to be met before credit provider can enforce guarantee against guarantor 369
91.......... Requirements to be met before credit provider can repossess mortgaged goods 370
92.......... Acceleration clauses........................................................................ 370
93.......... Requirements to be met before credit provider can enforce an acceleration clause 371
Division 3—Postponement of enforcement proceedings 373
94.......... Postponement of exercise of rights................................................. 373
95.......... Effect of negotiated postponement.................................................. 374
96.......... Postponement by court.................................................................... 374
97.......... Credit provider may apply for variation of postponement order...... 375
Division 4—Enforcement procedures for goods mortgaged 376
98.......... Information as to location of mortgaged goods............................... 376
99.......... Entry to residential property to take possession of goods............... 376
100........ Court may order entry..................................................................... 377
101........ Order for possession....................................................................... 377
102........ Procedures to be followed by credit provider after taking possession of goods 377
103........ Mortgagor may nominate purchaser of goods taken by credit provider 378
104........ Sale of goods by credit provider..................................................... 379
105........ Matters for which account can be debited after mortgagee sale of goods 380
106........ Compensation to mortgagor............................................................ 380
Division 5—Enforcement expenses 381
107........ Recovery of enforcement expenses................................................. 381
Division 6—Mortgagor’s remedies 382
108........ Mortgagor may apply to regain possession of mortgaged goods.... 382
109........ Order for possession for mortgagor................................................ 382
110........ Ancillary or consequential orders.................................................... 383
Part 6—Penalties for defaults of credit providers 384
Division 1—Penalties for breach of key disclosure and other requirements 384
111........ Key requirements............................................................................ 384
112........ Application for order relating to key requirements.......................... 385
113........ Penalty may be imposed for contravention of key requirement....... 385
114........ Penalty if application made by debtor or guarantor......................... 387
115........ Payment of penalty to debtor or guarantor...................................... 387
116........ Penalty if application made by a credit provider or ASIC............... 388
117........ Payment of penalty.......................................................................... 388
118........ Compensation for debtor or guarantor............................................ 388
119........ General provisions relating to applications by credit providers or ASIC 389
120........ ASIC may represent interests of debtors......................................... 389
121........ Directions pending court’s decision................................................ 389
122........ Offences.......................................................................................... 390
123........ Time limit for application for orders under this Division................ 390
Division 2—Other penalties 391
124........ Civil effect of other contraventions................................................. 391
Part 7—Related sale contracts 392
Division 1—Interpretation and application 392
125........ Meaning of sale contract................................................................ 392
126........ Sale contracts to which this Part applies.......................................... 392
127........ Linked credit providers and tied credit contracts............................. 392
Division 2—Liability of credit providers for suppliers’ misrepresentations 394
128........ Credit provider liable with respect to supplier’s misrepresentations etc. about tied credit contract 394
Division 3—Liability of credit providers in relation to goods 395
129........ Right to damages under sale contract against both supplier and linked credit provider (cf. section 73 of the Trade Practices Act 1974)......................................................................... 395
130........ Limits on debtor’s right of action against linked credit provider (cf. section 73 of the Trade Practices Act 1974) 396
131........ Liability of supplier to linked credit provider (cf. section 73 of the Trade Practices Act 1974) 398
132........ Interest may be awarded (cf. section 73 of the Trade Practices Act 1974) 399
133........ Subrogation of credit provider (cf. section 73 of the Trade Practices Act 1974) 399
Division 4—Termination of related transactions 400
134........ Termination of sale contract which is conditional on obtaining credit 400
135........ Termination of (or recredit under) tied credit contract if sale contract terminated 400
136........ Termination of linked maintenance services contract if credit contract terminated 402
137........ Termination of contract under this Part to be in writing.................. 403
138........ Powers of court with respect to termination of contract under this Part 403
139........ Part 5 not to apply to termination of contract under this Part........... 403
Division 5—Other provisions 404
140........ Requirement as to source of credit for goods or services................ 404
141........ Prohibition on payment for goods or services by postdated bills of exchange or notes which exceed cash price of goods or services....................................................................................... 404
Part 8—Related insurance contracts 405
142........ Interpretation and application.......................................................... 405
143........ Requirement to take out insurance or to insure with particular insurer or on particular terms 405
144........ Financing of insurance premiums over mortgaged property........... 406
145........ Commission for consumer credit insurance.................................... 407
146........ Supply of copy of credit‑related insurance contract by insurer........ 407
147........ Rejection of debtor’s proposal for insurance................................... 408
148........ Termination of consumer credit insurance contract if credit contract terminated 408
149........ Termination of insurance contract over mortgaged property if credit contract terminated 409
Part 9—Advertising and related conduct 411
150........ Advertising..................................................................................... 411
151........ Persons liable for advertisements.................................................... 412
152........ Defence........................................................................................... 412
153........ Interest rates which may be disclosed............................................. 412
154........ False or misleading representations................................................. 413
155........ Harassment..................................................................................... 413
156........ Canvassing of credit at home.......................................................... 413
Part 10—Comparison rates 414
Division 1—Preliminary 414
157........ Object of Part.................................................................................. 414
158........ Part not to apply to continuing credit contracts................................ 414
159........ Definitions...................................................................................... 414
Division 2—Comparison rate in credit advertising 416
160........ Comparison rate mandatory in advertisements containing annual percentage rate 416
161........ The relevant comparison rate........................................................... 416
162........ Information about comparison rate.................................................. 416
163........ Warning about comparison rate....................................................... 417
164........ Other requirements for comparison rate.......................................... 417
Division 3—Comparison rate in other documents 418
165........ Comparison rates in documents other than credit advertising.......... 418
Division 4—Miscellaneous 419
166........ Calculation of comparison rates...................................................... 419
167........ Compliance grace period following changes in interest or fees....... 419
168........ Regulations—exemptions and other matters................................... 419
Part 11—Consumer leases 420
Division 1—Interpretation and application 420
169........ Meaning of consumer lease............................................................ 420
170........ Consumer leases to which this Part applies..................................... 420
171........ Consumer leases to which this Part does not apply......................... 421
172........ Presumptions relating to application of this Part............................. 422
Division 2—Form of and information to be included in consumer leases 423
173........ Form of consumer lease.................................................................. 423
174........ Disclosures in consumer leases....................................................... 423
175........ Copy of lease etc. for lessee............................................................ 424
176........ Further goods and deferrals or waivers under consumer leases...... 424
Division 3—Other provisions applicable to consumer leases 426
177........ Application of certain Code provisions to consumer leases............ 426
178........ Notice of repossession.................................................................... 426
179........ Termination of lease........................................................................ 427
Part 12—Miscellaneous 428
Division 1—Tolerances and assumptions 428
180........ Tolerances and assumptions relating to information........................ 428
181........ Tolerances relating to contracts and other documents...................... 429
182........ Regulations..................................................................................... 429
Division 2—Documentary provisions 430
183........ Form of notices............................................................................... 430
184........ Legibility and language................................................................... 430
185........ Copies of contracts and other documents........................................ 431
186........ Signing of documents..................................................................... 431
187........ Electronic transactions and documents............................................ 432
Division 3—General provisions 433
188........ Assignment by credit provider........................................................ 433
189........ Assignment by debtor, mortgagor or guarantor.............................. 433
190........ Appropriation of payments............................................................. 433
191........ Contracting out................................................................................ 434
192........ Indemnities...................................................................................... 434
193........ Effect of noncompliance.................................................................. 435
194........ Giving notice or other document..................................................... 435
195........ Manner of giving notice or other document.................................... 437
196........ Date of notice or other document.................................................... 438
197........ Extensions of time........................................................................... 438
198........ Orders of court................................................................................ 438
199........ Conduct of agents and related matters............................................. 438
Division 4—Provisions relating to offences 440
200........ Offences by officers, agents or employees...................................... 440
201........ Offences by corporations................................................................ 440
202........ Limitations...................................................................................... 440
203........ Application of section 4K of the Crimes Act 1914.......................... 440
Division 5—Exemptions from this Code 441
203A..... Exemptions by ASIC...................................................................... 441
203B..... Exemptions by the regulations........................................................ 441
Part 13—Principal definitions 442
204........ Principal definitions........................................................................ 442
Part 14—Miscellaneous provisions relating to interpretation 451
Division 1—Preliminary 451
205........ Displacement of Part by contrary intention..................................... 451
Division 2—General 452
206........ Material that is, and is not, part of this Code................................... 452
207........ References to particular Acts and to enactments.............................. 452
208........ Compliance with forms................................................................... 452
Division 3—Terms and references 454
209........ Provisions relating to defined terms and gender and number.......... 454
210........ Meaning of may and must etc......................................................... 454
211........ Effect of express references to bodies corporate and individuals.... 454
212........ Reference to certain provisions of Code.......................................... 455
213........ Reference to provisions of this Code or an Act is inclusive............ 455
Division 4—Functions and powers 456
214........ Power to make instrument or decision includes power to amend or repeal 456
215........ Matters for which statutory instruments may make provision......... 456
216........ Presumption of validity and power to make.................................... 457
217........ Exercise of powers between enactment and commencement........... 458
Division 5—Distance, time and age 461
218........ Matters relating to distance, time and age........................................ 461
Notes 463
An Act relating to credit, and for related purposes
Chapter 1—Introduction
Part 1‑1—Introduction
1 Short title [see Note 1]
This Act may be cited as the National Consumer Credit Protection Act 2009.
2 Commencement
(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.
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.
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 external dispute resolution scheme: see section 11.
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.
Australia, when used in a geographical sense, does not include an external Territory.
Note: Paragraph 17(a) of the Acts Interpretation Act 1901 would otherwise provide that Australia included the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands.
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 section 761A of the Corporations Act 2001.
authorised, in relation to a credit activity: see subsection 35(2).
banker has the same meaning as in section 9 of the Corporations Act 2001.
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: see subsection 81(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.
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
(c) financial reports or financial records, however compiled, recorded or stored; 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.
commission includes any financial or other benefit in the nature of a commission.
Commonwealth credit legislation means this Act and the Transitional Act.
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.
contravention, in relation to a Commonwealth law, includes an ancillary offence relating to an offence against that law.
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 contract has the same meaning as in section 4 of the National Credit Code.
credit legislation means:
(a) this Act; and
(b) the Transitional Act; and
(c) Division 2 of Part 2 of the ASIC Act and regulations made for the purpose of that Division; 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 provider 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.
credit registers: see section 213.
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.
debtor has the same meaning as in section 204 of the National Credit Code.
director has the same meaning as in section 9 of the Corporations Act 2001.
disqualification order means an order of the court under section 86.
document registers: see section 219.
engage in conduct means:
(a) do an act; or
(b) omit to perform an act.
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 records: see subsection 88(2).
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.
guarantee means a guarantee to which the National Credit Code applies.
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.
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 (within the meaning of the Corporations Act 2001); or
(b) in the case of a body corporate—a body corporate that is an externally‑administered 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.
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 means the lessor under a consumer lease, 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).
lodge with ASIC: see section 216.
lower court means:
(a) the Federal Magistrates Court; or
(b) a court of a State or Territory that is not a superior court.
malice: see subsection 16(2).
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.
mortgagee means the mortgagee under a mortgage, and includes a person who is a mortgagee because of section 10.
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.
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).
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
(c) a part of a structure, building, aircraft, vehicle, vessel or of such a place.
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.
qualified privilege has a meaning affected by section 16.
receiving court: see section 191.
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.
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.
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 Magistrates Court—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.
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.
senior manager has the same meaning as in section 9 of the Corporations Act 2001.
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.
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.
superior court means any of the following courts:
(a) the Federal Court;
(b) the Supreme Court of a State or Territory.
Territory means:
(a) the Australian Capital Territory; or
(b) the Northern Territory; or
(c) the Jervis Bay Territory;
and, when used in a geographical sense, includes the coastal sea of the Territory.
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.
value of a credit contract, mortgage, guarantee or consumer lease: see section 199.
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.
(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 contracts for credit cards).
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
(c) suggests that the consumer remain in 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
11 Meaning of approved external dispute resolution scheme
(1) A person is a member of an approved external dispute resolution scheme if the person is a member of one or more external dispute resolution schemes that:
(a) is, or are, approved by ASIC in accordance with the regulations; and
(b) covers, or together cover, disputes in relation to the credit activities engaged in by the person or its representatives.
(2) Regulations made for the purpose of paragraph (1)(a) may also deal with the variation or revocation of approvals given by ASIC.
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;
(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 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.
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.
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 subsection 22(3) 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
(c) the reference to the Commonwealth Parliament of the matter covered by subsection (4) does not include:
(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
(c) that State’s amendment reference, and the amendment reference of every other State, terminates on the same day.
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
(c) the Commonwealth credit legislation other than a specified provision; 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, charging fees for unlicensed conduct, and giving misleading information.
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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 200 penalty units, or 2 years imprisonment, or both.
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
(c) the person’s conduct in engaging in the credit activity is within the authority 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
(c) the person’s conduct in engaging in the credit activity is within the authority of the principal; and
(d) the principal is exempted from subsections (1) and (2) under paragraph 109(1)(a), 109(3)(a) or 110(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 and to credit activities
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: 2,000 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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units, or 1 year imprisonment, or both.
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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 200 penalty units, or 2 years imprisonment, or both.
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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units, or 1 year imprisonment, or both.
33 Prohibition on giving misleading information etc.
Prohibition on giving misleading information etc.
(1) A person (the giver) must not, in the course of engaging in a credit activity, give information or a document to another person if the giver knows, or is reckless as to whether, the information or document is false in a material particular or materially misleading.
Civil penalty: 2,000 penalty units.
Offence
(2) A person commits an offence if:
(a) the person gives information or a document to another person; and
(b) the person does so in the course of engaging in a credit activity; and
(c) the information or document is false in a material particular or materially misleading.
Criminal penalty: 100 penalty units, or 2 years imprisonment, or both.
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) ASIC has no reason to believe that the person is not a fit and proper person to engage in credit activities; and
(d) the person has given ASIC any additional information or audit report requested by ASIC under subsection (4); 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).
Matters ASIC must have regard to
(2) For the purposes of paragraphs (1)(b) and (c), ASIC must (subject to Part VIIC of the Crimes Act 1914) have regard to the following:
(a) whether a registration under the Transitional Act, a licence or an Australian financial services licence of the person has ever been suspended or cancelled;
(b) whether a banning order or disqualification order under Part 2‑4 has ever been made against the person;
(c) whether a banning order or disqualification order under Division 8 of Part 7.6 of the Corporations Act 2001 has ever been made against the person;
(d) whether the person has ever been banned from engaging in a credit activity under a law of a State or Territory;
(e) any relevant information given to ASIC by a State or Territory, or an authority of a State or Territory, in relation to the person;
(f) if the person is not the trustees of a trust—whether the person has ever been insolvent;
(g) if the person is a single natural person:
(i) whether the person has ever been disqualified from managing corporations under Part 2D.6 of the Corporations Act 2001; and
(ii) any criminal conviction of the person, within 10 years before the application was made;
(h) if the person is not a single natural person, whether ASIC has reason to believe that any of the following persons is not a fit and proper person to engage in credit activities:
(i) if the person is a body corporate—each 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;
(ii) if the person is a partnership or the trustees of a trust—each partner or trustee who would perform duties in relation to the credit activities to be authorised by the licence;
(i) any other matter ASIC considers relevant;
(j) any other matter prescribed by the regulations.
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.
(3) ASIC must (subject to Part VIIC of the Crimes Act 1914), in considering whether it has reason to believe that a person referred to in paragraph (2)(h) is not a fit and proper person to engage in credit activities, have regard to:
(a) the matters set out in paragraphs (2)(a) to (g); and
(b) any other matter ASIC considers relevant; and
(c) any other matter prescribed by the regulations;
in relation to that person.
ASIC may request information or audit report 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, either or both of the following:
(a) additional 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.
(5) If the person does not lodge with ASIC the additional information or audit report requested by ASIC under subsection (4) within the time specified in the notice, the person is taken to have withdrawn the application. ASIC may extend the time by giving a written notice to the person.
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.
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).
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
(c) if the decision is not to grant the applicant a licence—the reasons for the decision.
(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
(c) the licence may be cancelled 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) 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.
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.
Division 5—Obligations of licensees
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
(c) comply with the conditions on the licence; and
(d) comply with the credit legislation; and
(e) take reasonable steps to ensure that its representatives comply with the credit legislation; 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
(i) be a member of an approved external dispute resolution 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.
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
(c) any other matters that are prescribed by the regulations.
(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).
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 the credit activities engaged in by the licensee or its representatives.
(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
(c) may require all the same information, or may contain differences as to the information they require; 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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.
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
(c) the conduct contravenes the requirement.
Criminal penalty: 10 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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.
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
(c) the conduct contravenes the requirement.
Criminal penalty: 10 penalty units.
(5) Subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.
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.
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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 10 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: 2,000 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: 2,000 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
(c) the conduct contravenes the requirement.
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.
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 does not engage, or ceases to engage, in credit activities; or
(c) any of the matters set out in subsection (2) applies to any of the following persons:
(i) the licensee;
(ii) if the licensee is a body corporate—a director, secretary or senior manager of the body corporate who performs duties in relation to credit activities;
(iii) if the licensee is a partnership or the trustees of a trust—a partner or trustee who performs duties in relation to credit activities.
(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) ASIC has reason to believe that the licensee is not a fit and proper person to engage in credit activities; or
(d) the application for the licence:
(i) was false in a material particular or materially misleading; or
(ii) omitted a material matter.
(2) For the purposes of paragraphs (1)(b) and (c), ASIC must (subject to Part VIIC of the Crimes Act 1914) have regard to the following:
(a) if the person is a natural person—the matters set out in paragraphs 37(2)(a) to (f) and subparagraph 37(2)(g)(i) in relation to the person;
(b) if the person is not a natural person:
(i) the matters set out in paragraphs 37(2)(a) to (f) in relation to the person; and
(ii) whether ASIC has reason to believe that any of the persons referred to in paragraph 37(2)(h) in relation to the person is not a fit and proper person to engage in credit activities;
(c) any criminal conviction of the person, within 10 years before the licence is proposed to be suspended or cancelled;
(d) any other matter ASIC considers relevant;
(e) any other matter prescribed by the regulations.
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.
(3) ASIC must (subject to Part VIIC of the Crimes Act 1914), in considering whether it has reason to believe that a person referred to in subparagraph (2)(b)(ii) is not a fit and proper person to engage in credit activities, have regard to the matters set out in paragraphs (2)(a), (c), (d) and (e) in relation to the person.
(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
(c) a person who is not a member of an approved external dispute resolution scheme; 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
(c) a natural person who is not a member of an approved external dispute resolution scheme; 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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 100 penalty units, or 2 years imprisonment, or both.
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:
(c) revoke the authorisation; or
(d) vary the authorisation so that it is no longer, to any extent, of no effect under this Division.
Civil penalty: 2,000 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
(c) the conduct contravenes subsection (1).
Criminal penalty: 100 penalty units, or 2 years imprisonment, or both.
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: 2,000 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: 2,000 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;
(c) details of the external dispute resolution scheme of which the credit representative is a member;
(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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.
(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: 2,000 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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units, or 1 year imprisonment, or both.
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 an external Territory or of a country outside Australia and the external Territories; 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
(c) on which the client in fact relied in good faith.
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
(c) the conduct is within the authority of:
(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 the banning and disqualification of persons from engaging in credit activities.
Division 2 deals with banning orders, which are orders made by ASIC that prohibit a person from engaging in credit activities.
Division 3 deals with disqualification orders, which are orders of the court that disqualify a person from engaging in credit activities.
Division 2—Banning orders
80 ASIC’s power to make a banning order
(1) ASIC may make a banning order against a person:
(a) if ASIC suspends or cancels a licence of the person; or
(b) for a person other than the trustees of a trust—if the person becomes insolvent; or
(c) for a natural person—if the person is convicted of fraud; 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 engage in credit activities; 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.
(2) For the purposes of paragraphs (1)(e) and (f), ASIC must (subject to Part VIIC of the Crimes Act 1914) have regard to the following:
(a) if the person is a natural person—the matters set out in paragraphs 37(2)(a) to (f) and subparagraph 37(2)(g)(i) in relation to the person;
(b) if the person is not a natural person:
(i) the matters set out in paragraphs 37(2)(a) to (f) in relation to the person; and
(ii) whether ASIC has reason to believe that any of the persons referred to in paragraph 37(2)(h) in relation to the person is not a fit and proper person to engage in credit activities;
(c) any criminal conviction of the person, within 10 years before the banning order is proposed to be made;
(d) any other matter ASIC considers relevant;
(e) any other matter prescribed by the regulations.
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.
(3) ASIC must (subject to Part VIIC of the Crimes Act 1914), in considering whether it has reason it has reason to believe that a person referred to in subparagraph (2)(b)(ii) is not a fit and proper person to engage in credit activities, have regard to the matters set out in paragraphs (2)(a), (c), (d) and (e) in relation to the person.
(4) Despite subsection (1), ASIC may only make a banning order against a person 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.
(5) Subsection (4) does not apply if:
(a) ASIC’s grounds for making the banning order against the 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.
(6) Subsection (4) also does not apply if:
(a) ASIC’s grounds for making the banning order against the person include that the person has been convicted of fraud (see paragraph (1)(c)); and
(b) the person has been convicted of serious fraud.
(7) ASIC must give a copy of the banning order to the person against whom it was made.
81 What is a banning order?
(1) A banning order is a written order that prohibits a person from engaging in any credit activities or specified credit activities in specified circumstances or capacities.
(2) The order may prohibit the person against whom it is made from engaging in a credit activity:
(a) permanently; or
(b) for a specified period.
(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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 100 penalty units, or 2 years imprisonment, or both.
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 an order 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) an order disqualifying the person, permanently or for a specified period, from engaging in credit activities, or specified credit activities, in specified circumstances or capacities; 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
(c) comply with subsection 90(2) in relation to the conversion of records into the English language; and
(d) comply with section 91 in relation to the location and production of records and particulars.
Civil penalty: 2,000 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
(c) any trust account statement or trust account report required under section 100.
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
(c) the conduct contravenes subsection (1).
Criminal penalty: 200 penalty units, or 5 years imprisonment, or both.
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 commissions, interest, and other sources, and all expenses, commissions, 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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units, or 6 months imprisonment, or both.
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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.
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: 2,000 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: 2,000 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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.
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: 2,000 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: 2,000 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
(c) be lodged with ASIC in accordance with section 101.
(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
(c) the conduct contravenes the requirement.
Criminal penalty: 200 penalty units, or 5 years imprisonment, or both.
Meaning of financial year
(6) A financial year of the credit service licensee means:
(a) if the credit service licensee is not a body corporate—a year ending on 30 June; and
(b) if the credit service licensee is a body corporate—a financial year of the body corporate (within the meaning of section 323D of the Corporations Act 2001).
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
(c) otherwise hinder, obstruct or delay the auditor in the performance or exercise of the auditor’s duties or powers.
Civil penalty: 2,000 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
(c) the person’s conduct contravenes the requirement.
Criminal penalty: 100 penalty units, or 2 years imprisonment, or both.
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: 2,000 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
(c) the auditor’s conduct contravenes the requirement.
Criminal penalty: 50 penalty units, or 1 year imprisonment, or both.
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
(c) the giving of a report to the licensee under subsection 104(1).
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); and
(c) the auditors that prepare those reports; 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
(c) instruments made for the purposes of this Chapter.
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
(c) exempt a class of credit activities 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 Legislative Instruments 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
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.
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 commission 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.
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: 2,000 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
(c) specify the licensee’s name and contact details; 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 commissions 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 those commissions 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 approved external dispute resolution scheme of which the licensee is a member; 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 commissions; and
(ii) how commissions or amounts of commissions 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
(c) the conduct contravenes the requirement.
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
(c) suggesting that the consumer remain in a particular credit contract with a particular credit provider;
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: 2,000 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: 2,000 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: 2,000 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: 2,000 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:
(c) made a preliminary assessment that:
(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: 2,000 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: 2,000 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
(c) take reasonable steps to verify 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: 2,000 penalty units.
(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: 2,000 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.
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: 2,000 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.
(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.
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: 2,000 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: 2,000 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
(c) the conduct contravenes the requirement.
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, commissions etc. relating to credit contracts
121 Fees, commissions 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
(c) suggesting that the consumer remain in a particular credit contract with a particular credit provider;
give the consumer a credit proposal disclosure document in accordance with subsection (2).
Civil penalty: 2,000 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 commissions 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 commissions; and
(b) how amounts of commissions 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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.
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: 2,000 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.
(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.
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
(c) the conduct contravenes the requirement.
Criminal penalty: 100 penalty units, or 2 years imprisonment, or both.
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: 2,000 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.
(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.
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
(c) the conduct contravenes the requirement.
Criminal penalty: 100 penalty units, or 2 years imprisonment, or both.
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).
Part 3‑2—Licensees that are credit providers under credit contracts
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 entering or increasing the credit limit of 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: 2,000 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
(c) specify the licensee’s name and contact details; 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 approved external dispute resolution scheme of which the licensee is a member; 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
(c) the conduct contravenes the requirement.
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: 2,000 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
(c) specify the licensee’s name and contact details; 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 approved external dispute resolution scheme of which the licensee is a member; 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
(c) the conduct contravenes the requirement.
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—Obligations of credit providers before entering credit contracts or increasing credit limits
128 Obligations of credit providers before entering credit contracts or increasing credit limits
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;
on a day (the credit day) unless the licensee has, within 90 days (or other period prescribed by the regulations) before the credit day:
(c) made an assessment that:
(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: 2,000 penalty units.
129 Assessment of unsuitability of the credit contract
For the purposes of paragraph 128(1)(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(1)(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
(c) take reasonable steps to verify 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: 2,000 penalty units.
(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).
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.
Civil penalty: 2,000 penalty units.
(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.
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: 2,000 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: 2,000 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: 2,000 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
(c) the conduct contravenes the requirement.
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: 2,000 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.
(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.
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
(c) the conduct contravenes the requirement.
Criminal penalty: 100 penalty units, or 2 years imprisonment, or both.
Part 3‑3—Licensees that provide credit assistance in relation to consumer leases
Division 1—Introduction
134 Guide to this Part
This Part has rules that apply to licensees that provide credit assistance in relation to consumer leases. These rules are aimed at better informing consumers and preventing them from being in unsuitable consumer leases. However, these rules do not apply to a licensee that will be the lessor under the consumer lease.
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 consumer lease, to make a preliminary assessment as to whether the lease 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 consumer lease, to give the consumer a document that discloses certain information (for example, the commission the licensee is likely to receive).
Division 6 prohibits a licensee from providing credit assistance to a consumer in relation to a consumer lease if the lease will be unsuitable for the consumer.
135 Application of this Part
This Part does not apply in relation to credit assistance provided by a licensee in relation to a consumer lease if the licensee is or will be the lessor under the consumer lease.
Division 2—Credit guide of credit assistance providers
136 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 consumer lease, give the consumer the licensee’s credit guide in accordance with subsection (2).
Civil penalty: 2,000 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
(c) specify the licensee’s name and contact details; 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 lessors that the licensee conducts business with when providing credit assistance in relation to consumer leases—the names of those lessors; and
(ii) if there are more than 6 lessors that the licensee conducts business with when providing credit assistance in relation to consumer leases—the names of the 6 lessors with whom the licensee reasonably believes it conducts the most business; and
(g) give information about:
(i) any commissions that the licensee, or an employee, director or credit representative of the licensee, is likely to receive, directly or indirectly, from lessors in relation to consumer leases for which the licensee has provided credit assistance; and
(ii) a reasonable estimate of the amounts of those commissions 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 approved external dispute resolution scheme of which the licensee is a member; and
(i) give information about the licensee’s obligations under sections 143 and 146; 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 commissions; and
(ii) how commissions or amounts of commissions 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
(c) the conduct contravenes the requirement.
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 consumer leases
137 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 consumer lease with a particular lessor; or
(b) suggesting that the consumer remain in a particular consumer lease with a particular lessor;
unless:
(c) the licensee has given the consumer a quote in accordance with subsection (2); and
(d) 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
(e) the licensee has given the consumer a copy of the accepted quote.
Civil penalty: 2,000 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 consumer lease is not entered; 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: 2,000 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: 2,000 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: 2,000 penalty units.
Division 4—Obligations of credit assistance providers before providing credit assistance for consumer leases
138 Obligations of credit assistance providers before providing credit assistance for consumer leases
(1) A licensee must not provide credit assistance to a consumer on a day (the assistance day) by:
(a) suggesting that the consumer apply for a particular consumer lease with a particular lessor; or
(b) assisting the consumer to apply for a particular consumer lease with a particular lessor;
unless the licensee has, within 90 days (or other period prescribed by the regulations) before the assistance day:
(c) made a preliminary assessment that:
(i) is in accordance with subsection 139(1); and
(ii) covers the period proposed for the entering of the lease; and
(d) made the inquiries and verification in accordance with section 140.
Civil penalty: 2,000 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 consumer lease with a particular lessor 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 139(2); and
(ii) covers a period in which the assistance day occurs; and
(b) made the inquiries and verification in accordance with section 140.
Civil penalty: 2,000 penalty units.
139 Preliminary assessment of unsuitability of the consumer lease
(1) For the purposes of paragraph 138(1)(c), the licensee must make a preliminary assessment that:
(a) specifies the period the assessment covers; and
(b) assesses whether the consumer lease will be unsuitable for the consumer if the lease is entered in that period.
(2) For the purposes of paragraph 138(2)(a), the licensee must make a preliminary assessment that:
(a) specifies the period the assessment covers; and
(b) assesses whether the consumer lease will be unsuitable for the consumer if the consumer remains in the lease in that period.
Note: The licensee is not required to make a preliminary assessment under this section if the credit assistance is not provided.
140 Reasonable inquiries etc. about the consumer
(1) For the purposes of paragraph 138(1)(d) or 138(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 consumer lease; and
(b) make reasonable inquiries about the consumer’s financial situation; and
(c) take reasonable steps to verify 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: 2,000 penalty units.
(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).
141 When the consumer lease must be assessed as unsuitable—entering lease
Requirement to assess the lease as unsuitable
(1) For a preliminary assessment under subsection 139(1) about entering a consumer lease, the licensee must assess that the lease will be unsuitable for the consumer if the lease will be unsuitable for the consumer under subsection (2).
Civil penalty: 2,000 penalty units.
Note: Even if the lease will not be unsuitable for the consumer under subsection (2), the licensee may still assess that the lease will be unsuitable for other reasons.
Particular circumstances when the lease will be unsuitable
(2) The lease 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 lease, or could only comply with substantial hardship, if the lease is entered in the period proposed for it to be entered; or
(b) the lease will not meet the consumer’s requirements or objectives if the lease is entered in the period proposed for it to be entered; or
(c) if the regulations prescribe circumstances in which a consumer lease is unsuitable—those circumstances will apply to the lease if the lease is entered in the period proposed for it to be entered.
(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 lease 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.
Information to be used to determine if lease will be unsuitable
(4) For the purposes of determining under subsection (2) whether the lease 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 140(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 140.
142 When the consumer lease must be assessed as unsuitable—remaining in lease
Requirement to assess the lease as unsuitable
(1) For a preliminary assessment under subsection 139(2) about remaining in a consumer lease, the licensee must assess that the lease will be unsuitable for the consumer if the lease will be unsuitable for the consumer under subsection (2).
Civil penalty: 2,000 penalty units.
Note: Even if the lease will not be unsuitable for the consumer under subsection (2), the licensee may still assess that the lease will be unsuitable for other reasons.
Particular circumstances when the lease will be unsuitable
(2) The lease 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 lease, or could only comply with substantial hardship if the consumer remains in the lease in the period covered by the preliminary assessment; or
(b) the lease will not meet the consumer’s requirements or objectives if the consumer remains in the lease in the period covered by the preliminary assessment; or
(c) if the regulations prescribe circumstances in which a consumer lease is unsuitable—those circumstances will apply to the lease if the consumer remains in the lease in the period covered by the preliminary assessment.
(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 lease 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.
Information to be used to determine if lease will be unsuitable
(4) For the purposes of determining under subsection (2) whether the lease 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 140(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 140.
143 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 137, 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: 2,000 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: 2,000 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
(c) the conduct contravenes the requirement.
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, commissions etc. relating to consumer leases
144 Fees, commissions etc. relating to consumer leases
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 consumer lease with a particular lessor; or
(b) suggesting that the consumer remain in a particular consumer lease with a particular lessor;
give the consumer a lease proposal disclosure document in accordance with subsection (2).
Civil penalty: 2,000 penalty units.
(2) The lease 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 consumer lease and the method used for working out that amount;
(b) a reasonable estimate of the total amount of any commissions that the licensee, or an employee, director or credit representative of the licensee, is likely to receive in relation to the consumer lease 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 lessor in relation to applying for the consumer lease;
(d) a reasonable estimate of the total amount of any fees or charges that the consumer is likely to be liable to pay to another person in relation to applying for the consumer lease.
(3) For the purposes of paragraph (2)(b), the regulations may prescribe:
(a) the method for working out amounts of commissions; and
(b) how amounts of commissions must be described.
Manner of giving lease proposal disclosure document
(4) The licensee must give the lease proposal disclosure document to the consumer in the manner (if any) prescribed by the regulations.
145 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 consumer lease, 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: 2,000 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
(c) the conduct contravenes the requirement.
Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.
Division 6—Prohibition on suggesting, or assisting with, unsuitable consumer leases
146 Prohibition on suggesting, or assisting with, unsuitable consumer leases
Prohibition on suggesting, or assisting with, unsuitable leases
(1) A licensee must not provide credit assistance to a consumer by:
(a) suggesting that the consumer apply for a particular consumer lease with a particular lessor; or
(b) assisting the consumer to apply for a particular consumer lease with a particular lessor;
if the lease will be unsuitable for the consumer under subsection (2).
Civil penalty: 2,000 penalty units.
When the lease will be unsuitable
(2) The lease 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 lease, or could only comply with substantial hardship, if the lease is entered in the period proposed for it to be entered; or
(b) the lease will not meet the consumer’s requirements or objectives if the lease is entered in the period proposed for it to be entered; or
(c) if the regulations prescribe circumstances in which a consumer lease is unsuitable—those circumstances will apply to the lease if the lease is entered in the period proposed for it to be entered.
(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 lease 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.
Information to be used to determine if lease will be unsuitable
(4) For the purposes of determining under subsection (2) whether the lease 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 140(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 140.
Consumer lease not unsuitable under regulations
(5) The regulations may prescribe particular situations in which a consumer lease 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
(c) the conduct contravenes the requirement.
Criminal penalty: 100 penalty units, or 2 years imprisonment, or both.
147 Prohibition on suggesting to consumers to remain in unsuitable consumer leases
Prohibition on suggesting to remain in unsuitable lease
(1) A licensee must not provide credit assistance to a consumer by suggesting that the consumer remain in a particular consumer lease with a particular lessor if the lease is unsuitable for the consumer under subsection (2).
Civil penalty: 2,000 penalty units.
When the lease is unsuitable
(2) The lease 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 lease, or only able to comply with substantial hardship; or
(b) the lease does not meet the consumer’s requirements or objectives; or
(c) if the regulations prescribe circumstances in which a consumer lease is unsuitable—those circumstances apply to the lease.
(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 lease 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.
Information to be used to determine if lease is unsuitable
(4) For the purposes of determining under subsection (2) whether the lease 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 140(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 140.
Consumer lease not unsuitable under regulations
(5) The regulations may prescribe particular situations in which a consumer lease 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
(c) the conduct contravenes the requirement.
Criminal penalty: 100 penalty units, or 2 years imprisonment, or both.
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 consumer lease because the licensee reasonably believed that there was no other consumer lease 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 1: 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).
Note 2: Sections 72 and 94 of the National Credit Code apply in relation to consumer leases because of section 177 of the 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).
Part 3‑4—Licensees that are lessors under consumer leases
Division 1—Introduction
148 Guide to this Part
This Part has rules that apply to licensees that are lessors. These rules are aimed at better informing consumers and preventing them from being in unsuitable consumer leases.
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 entering a consumer lease, to make an assessment as to whether the lease 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 a consumer lease that is unsuitable for a consumer.
Division 2—Credit guide of lessors
149 Credit guide of lessors
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 consumer lease with a consumer who will be the lessee under the lease, give the consumer the licensee’s credit guide in accordance with subsection (2).
Civil penalty: 2,000 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
(c) specify the licensee’s name and contact details; 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 approved external dispute resolution scheme of which the licensee is a member; and
(f) give information about the licensee’s obligations under sections 155 and 156; 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
(c) the conduct contravenes the requirement.
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.
150 Credit guide of lessors 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 lessor under a consumer lease, give the lessee under the lease the licensee’s credit guide in accordance with subsection (2).
Civil penalty: 2,000 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
(c) specify the licensee’s name and contact details; 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 approved external dispute resolution scheme of which the licensee is a member; 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
(c) the conduct contravenes the requirement.
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—Obligations of lessors before entering consumer leases
151 Obligations of lessors before entering consumer leases
A licensee must not enter a consumer lease with a consumer who will be the lessee under the lease on a day (the lease day) unless the licensee has, within 90 days (or other period prescribed by the regulations) before the lease day:
(a) made an assessment that:
(i) is in accordance with section 152; and
(ii) covers a period in which the lease day occurs; and
(b) made the inquiries and verification in accordance with section 130.
Civil penalty: 2,000 penalty units.
152 Assessment of unsuitability of the consumer lease
For the purposes of paragraph 151(a), the licensee must make an assessment that:
(a) specifies the period the assessment covers; and
(b) assesses whether the consumer lease will be unsuitable for the consumer if the lease is entered in that period.
Note: The licensee is not required to make the assessment under this section if the lease is not entered.
153 Reasonable inquiries etc. about the consumer
Requirement to make inquiries and take steps to verify
(1) For the purposes of paragraph 151(b), the licensee must, before making the assessment:
(a) make reasonable inquiries about the consumer’s requirements and objectives in relation to the consumer lease; and
(b) make reasonable inquiries about the consumer’s financial situation; and
(c) take reasonable steps to verify 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: 2,000 penalty units.
(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).
154 When consumer lease must be assessed as unsuitable
Requirement to assess the lease as unsuitable
(1) The licensee must assess that the consumer lease will be unsuitable for the consumer if the lease will be unsuitable for the consumer under subsection (2).
Note: Even if the lease will not be unsuitable for the consumer under subsection (2), the licensee may still assess that the lease will be unsuitable for other reasons.
Particular circumstances when the lease will be unsuitable
(2) The lease 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 lease, or could only comply with substantial hardship, if the lease is entered in the period covered by the assessment; or
(b) the lease will not meet the consumer’s requirements or objectives if the lease is entered in the period covered by the assessment; or
(c) if the regulations prescribe circumstances in which a consumer lease is unsuitable—those circumstances will apply to the lease if the lease is entered in the period covered by the assessment.
Civil penalty: 2,000 penalty units.
(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 lease 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.
Information to be used to determine if lease will be unsuitable
(4) For the purposes of determining under subsection (2) whether the lease 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 153(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 153.
155 Giving the consumer the assessment
Requirement to give assessment if requested
(1) If, before entering the consumer lease, 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 lease.
Note: The licensee is not required to give the consumer a copy of the assessment if the lease is not entered.
Civil penalty: 2,000 penalty units.
(2) If, during the period that:
(a) starts on the day (the lease day) the consumer lease is entered; 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 lease 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: 2,000 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: 2,000 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
(c) the conduct contravenes the requirement.
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 unsuitable consumer leases
156 Prohibition on entering unsuitable consumer leases
Prohibition on entering unsuitable lease
(1) A licensee must not enter a consumer lease with a consumer who will be the lessee under the lease if the lease is unsuitable for the consumer under subsection (2).
Civil penalty: 2,000 penalty units.
When the lease is unsuitable
(2) The lease is unsuitable for the consumer if, at the time it is entered:
(a) it is likely that the consumer will be unable to comply with the consumer’s financial obligations under the lease, or could only comply with substantial hardship; or
(b) the lease does not meet the consumer’s requirements or objectives; or
(c) if the regulations prescribe circumstances in which a consumer lease is unsuitable—those circumstances apply to the lease.
(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 lease 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.
Information to be used to determine if lease is unsuitable
(4) For the purposes of determining under subsection (2) whether the lease 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 153(1)(d) or (e);
(b) at the time the lease is entered:
(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 153.
Consumer lease not unsuitable under regulations
(5) The regulations may prescribe particular situations in which a consumer lease 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
(c) the conduct contravenes the requirement.
Criminal penalty: 100 penalty units, or 2 years imprisonment, or both.
Part 3‑5—Credit representatives
Division 1—Introduction
157 Guide to this Part
This Part has rules that apply to credit representatives when they act on behalf of a licensee under Part 3‑1, 3‑2, 3‑3 or 3‑4. These rules are aimed at better informing consumers.
Division 2 requires a credit representative to give its credit guide to a consumer. The credit guide has information about the credit representative.
Division 2—Credit guide of credit representatives
158 Credit guide of credit representatives
Requirement to give credit guide
(1) If a credit representative of a licensee gives a consumer the licensee’s credit guide when acting on behalf of the licensee under Part 3‑1, 3‑2, 3‑3 or 3‑4, the credit representative must at the same time give the consumer the credit representative’s credit guide in accordance with subsection (2).
Civil penalty: 2,000 penalty units.
(2) The credit representative’s credit guide must:
(a) be in writing; and
(b) be in the form (if any) prescribed by the regulations; and
(c) specify the credit representative’s name and contact details; and
(d) specify the credit representative’s credit representative number; and
(e) give information about:
(i) any fees that are payable by a consumer to the credit representative for acting as a credit representative; and
(ii) any charges that are payable by a consumer to the credit representative for matters associated with acting as a credit representative; 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 licensees for whom the credit representative is a credit representative—the names of those licensees; and
(ii) if there are more than 6 licensees for whom the credit representative is a credit representative—the names of the 6 licensees for whom the credit representative reasonably believes it conducts the most business; and
(iii) the credit activities the credit representative is authorised to engage in on behalf of the licensees referred to in subparagraph (i) or (ii); and
(g) give information about:
(i) any commissions the credit representative is likely to receive, directly or indirectly, from those licensees; and
(ii) a reasonable estimate of the amounts of those commissions or the range of those amounts; and
(iii) the method for working out those amounts; and
(h) give information about the credit representative’s procedure for resolving disputes with a consumer, including contact details for a consumer to access the approved external dispute resolution scheme of which the credit representative is a member; and
(i) 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 commissions; and
(ii) how commissions or amounts of commissions must be described.
Manner of giving credit guide
(4) The credit representative must give the consumer the credit representative’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
(c) the conduct contravenes the requirement.
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.
Part 3‑6—Debt collectors
Division 1—Introduction
159 Guide to this Part
This Part has rules that apply to a person who is authorised to collect payments under a credit contract or consumer lease from a debtor or lessee. These rules are aimed at better informing consumers.
Division 2 requires the person to give the person’s credit guide to the consumer. The credit guide has information about the person.
Division 2—Credit guide of debt collectors
160 Credit guide of debt collectors
Requirement to give credit guide
(1) A person who is a licensee or credit representative must, as soon as practicable after it becomes authorised by a credit provider to collect, on the credit provider’s behalf, repayments made by a debtor under a credit contract, give the debtor the person’s credit guide in accordance with subsection (3).
Civil penalty: 2,000 penalty units.
(2) A person who is a licensee or credit representative must, as soon as practicable after it becomes authorised by a lessor to collect, on the lessor’s behalf, payments made by a lessee under a consumer lease, give the lessee the person’s credit guide in accordance with subsection (3).
Civil penalty: 2,000 penalty units.
(3) The person’s credit guide must:
(a) be in writing; and
(b) be in the form (if any) prescribed by the regulations; and
(c) specify the person’s name and contact details; and
(d) if the person is a licensee—specify the person’s Australian credit licence number; and
(e) if the person is a credit representative—specify the person’s credit representative number; and
(f) give information about the person’s procedure for resolving disputes with a consumer, including contact details for a consumer to access:
(i) if the person is a licensee—the person’s internal dispute resolution procedure; and
(ii) in all cases—the approved external dispute resolution scheme of which the person is a member; and
(g) comply with any other requirements prescribed by the regulations.
(4) The regulations may prescribe information that need not be included in the credit guide, despite subsection (3).
Manner of giving credit guide
(5) The person must give the consumer the person’s credit guide in the manner (if any) prescribed by the regulations.
Strict liability 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
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units.
(7) Subsection (6) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Part 3‑7—Exemptions and modifications relating to this Chapter
Division 1—Introduction
161 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
162 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
(c) instruments made for the purposes of this Chapter.
163 Exemptions and modifications by ASIC
(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 contract from all or specified provisions to which this Part applies; or
(c) exempt a consumer lease 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 person, credit contract or consumer lease 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 class of credit contracts from all or specified provisions to which this Part applies; or
(c) exempt a class of consumer leases 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 class of persons, credit contracts or consumer leases, as if specified provisions were omitted, modified or varied as specified in the declaration.
(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.
(5) An exemption or declaration under subsection (1) must be in writing and ASIC must publish notice of it on its website.
(6) If conduct (including an omission) of a person would not have constituted an offence if a particular declaration under paragraph (1)(d) 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 Legislative Instruments 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.
164 Exemptions and modifications by the regulations
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 contract or a class of credit contracts from all or specified provisions to which this Part applies; or
(c) exempt a consumer lease or a class of consumer leases from all or specified provisions to which this Part applies; or
(d) provide that the provisions to which this Part applies apply as if specified provisions were omitted, modified or varied as specified in the regulations.
Chapter 4—Remedies
Part 4‑1—Civil penalty provisions
Division 1—Introduction
165 Guide to this Part
This Part is about civil penalty provisions. Civil penalty provisions impose obligations on certain persons. Civil remedies may be sought in relation to contraventions of these provisions.
Division 2 authorises the court to make a declaration that a person has contravened a civil penalty provision and order the person to pay a pecuniary penalty. Only ASIC may apply to the court for the declaration or order.
Division 3 has general provisions relating to civil penalty provisions, including rules about evidence and procedure.
Division 2—Declarations and pecuniary penalty orders for contraventions of civil penalty provisions
166 Declaration of contravention of civil penalty provision
Application for declaration of contravention
(1) Within 6 years of a person contravening a civil penalty provision, ASIC may apply to the court for a declaration that the person contravened the provision.
Declaration of contravention
(2) The court must make the declaration if it is satisfied that the person has contravened the provision.
(3) The declaration must specify the following:
(a) the court that made the declaration;
(b) the civil penalty provision that was contravened;
(c) the person who contravened the provision;
(d) the conduct that constituted the contravention.
Declaration of contravention conclusive evidence
(4) The declaration is conclusive evidence of the matters referred to in subsection (3).
167 Court may order person to pay pecuniary penalty for contravening civil penalty provision
Application for order
(1) Within 6 years of a person contravening a civil penalty provision, ASIC may apply to the court for an order that the person pay the Commonwealth a pecuniary penalty.
Court may order person to pay pecuniary penalty
(2) If a declaration has been made under section 166 that the person has contravened the provision, the court may order the person to pay to the Commonwealth a pecuniary penalty that the court considers is appropriate (but not more than the amount specified in subsection (3)).
Determining amount of pecuniary penalty
(3) The pecuniary penalty must not be more than:
(a) if the person is a natural person—the maximum number of penalty units referred to in the civil penalty provision; or
(b) if the person is a body corporate, a partnership or multiple trustees—5 times the maximum number of penalty units referred to in the civil penalty provision.
Note: This Act treats partnerships and multiple trustees as if they were persons (see sections 14 and 15).
Recovery of penalty as a debt
(4) The pecuniary penalty may be recovered as a debt due to the Commonwealth.
Division 3—General provisions relating to civil penalty provisions
168 Contravening a civil penalty provision is not an offence
A contravention of a civil penalty provision is not an offence.
169 Involvement in contravention treated in same way as actual contravention
A person who is involved in a contravention of a civil penalty provision is taken to have contravened that provision.
170 Civil evidence and procedure rules for proceedings relating to civil penalty provisions
The court must apply the rules of evidence and procedure for civil matters when hearing proceedings relating to a contravention, or proposed contravention, of a civil penalty provision.
171 Criminal proceedings before civil proceedings
The court must not make a declaration of contravention or a pecuniary penalty order against a person for a contravention of a civil penalty provision if the person has been convicted of an offence constituted by conduct that is substantially the same as the conduct constituting the contravention.
172 Criminal proceedings during civil proceedings
(1) Proceedings for a declaration of contravention or a pecuniary penalty order against a person for a contravention of a civil penalty provision are stayed if:
(a) criminal proceedings are brought or have already been brought against the person for an offence; and
(b) the offence is constituted by conduct that is substantially the same as the conduct in relation to which the declaration or order would be made.
(2) The proceedings for the declaration or order may be resumed if the person is not convicted of the offence. Otherwise, the proceedings for the declaration or order are dismissed.
173 Criminal proceedings after civil proceedings
Criminal proceedings may be brought against a person for conduct that is substantially the same as conduct constituting a contravention of a civil penalty provision regardless of whether a declaration of contravention or a pecuniary penalty order has been made against the person under this Division.
174 Evidence given in proceedings for pecuniary penalty not admissible in criminal proceedings
(1) Evidence of information given, or evidence of production of documents, by a natural person is not admissible in criminal proceedings against the natural person if:
(a) the natural person previously gave the information or produced the documents in proceedings for a declaration of contravention or a pecuniary penalty order against the natural person for a contravention of a civil penalty provision (whether or not the declaration or order was made); and
(b) the conduct alleged to constitute the offence is substantially the same as the conduct in relation to which the declaration or order was sought.
(2) However, this does not apply to criminal proceedings in relation to the falsity of the evidence given by the natural person in the proceedings for the declaration or order.
175 Civil double jeopardy
If a person is ordered to pay a pecuniary penalty under a civil penalty provision in relation to particular conduct, the person is not liable to be ordered to pay a pecuniary penalty under some other provision of a law of the Commonwealth in relation to that conduct.
Note: A court may make other orders, such as an order for compensation, in relation to particular conduct even if the court has made a pecuniary penalty order in relation to that conduct (see section 184).
Part 4‑2—Power of the court to grant remedies
Division 1—Introduction
176 Guide to this Part
This Part is about the remedies the court may grant.
Division 2 authorises the court to grant a range of remedies, including injunctions, compensation orders and other orders against those who engage in credit activities unlawfully.
Division 2—Power of the court to grant remedies
177 Injunctions
(1) If, on the application of ASIC or any other person, the court is satisfied that a person has engaged or is proposing to engage in conduct that constitutes or would constitute:
(a) a contravention of this Act; or
(b) attempting to contravene this Act; or
(c) aiding, abetting, counselling or procuring a person to contravene this Act; or
(d) inducing or attempting to induce, whether by threats, promises or otherwise, a person to contravene this Act; or
(e) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of this Act; or
(f) conspiring with others to contravene this Act;
the court may grant an injunction on such terms as the court considers appropriate.
(2) If an application for an injunction under subsection (1) has been made, the court may, if the court considers it appropriate, grant an injunction by consent of all the parties to the proceedings, whether or not the court is satisfied that the person has engaged, or is proposing to engage, in conduct of a kind referred to in subsection (1).
(3) The court may, if the court considers it appropriate, grant an interim injunction pending determination of an application under subsection (1).
(4) The court may revoke or vary an injunction granted under subsection (1) or (3).
(5) The power of the court to grant an injunction restraining a person from engaging in conduct may be exercised:
(a) whether or not it appears to the court that the person intends to engage again, or to continue to engage, in conduct of that kind; and
(b) whether or not the person has previously engaged in conduct of that kind; and
(c) whether or not there is an imminent danger of substantial damage to another person if the person engages in conduct of that kind.
(6) The power of the court to grant an injunction requiring a person to do an act or thing may be exercised:
(a) whether or not it appears to the court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; and
(b) whether or not the person has previously refused or failed to do that act or thing; and
(c) whether or not there is an imminent danger of substantial damage to another person if the person refuses or fails to do that act or thing.
(7) If ASIC applies to the court for the grant of an injunction under this section, the court must not require ASIC or another person, as a condition of granting an interim injunction, to give an undertaking as to damages.
(8) If the court has power under this section to grant an injunction against a person, the court may, either in addition to or in substitution for the grant of the injunction, order the person to pay damages to another person.
178 Compensation orders
Court may order person to pay compensation
(1) The court may order a person (the defendant) to compensate another person (the plaintiff) for loss or damage suffered by the plaintiff if:
(a) the defendant has contravened a civil penalty provision or has committed an offence against this Act (other than the National Credit Code); and
(b) the loss or damage resulted from the contravention or commission of the offence.
The order must specify the amount of compensation.
Note: An order may be made under this subsection whether or not a declaration of contravention has been made under section 166.
When order may be made
(2) The court may make the order only if:
(a) the plaintiff or ASIC (on behalf of the plaintiff) applies for an order under this section; and
(b) the application is made within 6 years of the day the cause of action that relates to the contravention or commission of the offence accrued.
Applications for order
(3) For the purposes of paragraph (2)(a), ASIC may make an application on behalf of the plaintiff, but only if the plaintiff has given consent in writing before the application is made.
Recovery of compensation as a debt
(4) If the court makes the order, the amount of compensation specified in the order that is to be paid to the plaintiff may be recovered as a debt due to the plaintiff.
179 Other orders to compensate loss or damage
Court may make other orders to compensate loss or damage
(1) If:
(a) a person (the defendant) has contravened a civil penalty provision or has committed an offence against this Act (other than the National Credit Code); and
(b) another person (the plaintiff) has suffered, or is likely to suffer, loss or damage as a result of the contravention or commission of the offence;
the court may make such order as the court considers appropriate against the defendant to:
(c) compensate the plaintiff, in whole or in part, for the loss or damage; or
(d) prevent or reduce the loss or damage suffered, or likely to be suffered, by the plaintiff.
Note: An order may be made under this subsection whether or not a declaration of contravention has been made under section 166.
(2) Without limiting subsection (1), examples of orders the court may make include:
(a) an order declaring the whole or any part of a contract, deed or arrangement made between the defendant and the plaintiff to be void and, if the court considers it appropriate, to have been void from the time it was entered or at all times on and after a specified day before the order is made; and
(b) an order varying such a contract, deed or arrangement in such manner as is specified in the order and, if the court considers it appropriate, declaring the contract, deed or arrangement to have had effect as so varied on and after a specified day before the order is made; and
(c) an order refusing to enforce any or all of the terms of such a contract, deed or arrangement; and
(d) an order directing the defendant to refund money or return property to the plaintiff; and
(e) an order directing the defendant to pay to the plaintiff the amount of loss or damage the plaintiff suffered; and
(f) an order directing the defendant, at the defendant’s own expense, to supply specified services to the plaintiff.
When order may be made
(3) The court may make the order only if:
(a) the plaintiff or ASIC (on behalf of the plaintiff) applies for an order under this section; and
(b) the application is made within 6 years of the day the cause of action that relates to the contravention or commission of the offence accrued.
Applications for order
(4) For the purposes of paragraph (3)(a), ASIC may make an application on behalf of the plaintiff, but only if the plaintiff has given consent in writing before the application is made.
Recovery of amount as a debt
(5) If the court makes an order that the defendant pay an amount specified in the order to the plaintiff, the plaintiff may recover the amount as a debt due to the plaintiff.
180 Orders in relation to unlawful credit activities
Court may make orders in relation to unlawful credit activities
(1) If:
(a) a person (the defendant) engages in a credit activity in relation to another person (the plaintiff); and
(b) the engaging in the activity contravenes section 29 (which requires the holding of licence);
the court may make such order as the court considers appropriate against the defendant:
(c) to prevent the defendant from profiting from the plaintiff by engaging in that activity; or
(d) to compensate the plaintiff, in whole or in part, for any loss or damage suffered as a result of the defendant engaging in that activity; or
(e) to prevent or reduce the loss or damage suffered, or likely to be suffered, by the plaintiff as a result of the defendant engaging in that activity.
Note: An order may be made under this subsection whether or not a declaration of contravention has been made under section 166.
(2) Without limiting subsection (1), examples of orders the court may make include:
(a) an order declaring the whole or any part of a contract, deed or arrangement made between the defendant and the plaintiff to be void and, if the court considers it appropriate, to have been void from the time it was entered or at all times on and after a specified day before the order is made; and
(b) an order varying such a contract, deed or arrangement in such manner as is specified in the order and, if the court considers it appropriate, declaring the contract, deed or arrangement to have had effect as so varied on and after a specified day before the order is made; and
(c) an order refusing to enforce any or all of the terms of such a contract, deed or arrangement; and
(d) an order directing the defendant to refund money or return property to the plaintiff; and
(e) an order directing the defendant to pay to the plaintiff the amount of loss or damage the plaintiff suffered; and
(f) an order directing the defendant, at the defendant’s own expense, to supply specified services to the plaintiff.
When order may be made
(3) The court may make the order only if:
(a) the plaintiff or ASIC (on behalf of the plaintiff) applies for an order under this section; and
(b) the application is made within 6 years of the day the cause of action that relates to the contravention or commission of the offence accrued.
Applications for order
(4) For the purposes of paragraph (3)(a), ASIC may make an application on behalf of the plaintiff, but only if the plaintiff has given consent in writing before the application is made.
Recovery of amount as a debt
(5) If the court makes an order that the defendant pay an amount specified in the order to the plaintiff, the plaintiff may recover the amount as a debt due to the plaintiff.
181 Preference must be given to compensate consumers
If the court considers that:
(a) it is appropriate to make a pecuniary penalty order against a person in relation to a contravention of a civil penalty provision or impose a fine against a person in relation to a commission of an offence against this Act (other than the National Credit Code); and
(b) it is appropriate to make an order under 178, 179 or 180 that the person pay compensation to a consumer who has suffered loss or damage in relation to the contravention; and
(c) the person does not have sufficient financial resources to pay both the pecuniary penalty or fine and the compensation;
the court must give preference to making the order for compensation.
182 Adverse publicity orders
(1) The court may, on application by ASIC, make an adverse publicity order against a person who has:
(a) contravened a civil penalty provision; or
(b) committed an offence against this Act.
(2) An adverse publicity order is an order that:
(a) requires a person to disclose, in the way and to the persons specified in the order, such information as is so specified, being information that the person has possession of or access to; or
(b) requires a person to publish, at the person’s expense and in the way specified in the order, an advertisement in the terms specified in, or determined in accordance with, the order.
(3) The court may make the order only if:
(a) ASIC applies for an order under this section; and
(b) the application is made within 6 years of the contravention or the commission of the offence.
183 Relief from liability for contravention of civil penalty provision
(1) If:
(a) proceedings for a contravention of a civil penalty provision are brought against a person; and
(b) in the proceedings it appears to the court that the person has, or may have, contravened a civil penalty provision but that:
(i) the person has acted honestly; and
(ii) having regard to all the circumstances of the case, the person ought fairly to be excused for the contravention;
the court may relieve the person either wholly or partly from a liability to which the person would otherwise be subject, or that might otherwise be imposed on the person, because of the contravention.
(2) If a person considers that proceedings for a contravention of a civil penalty provision will or may be brought against the person, the person may apply to the court for relief.
(3) On an application under subsection (2), the court may grant relief under subsection (1) as if the proceedings had been begun in the court.
184 Multiple remedies may be granted
To avoid doubt, the court may make an order under a provision of this Act in addition to one or more orders under another provision of this Act.
Part 4‑3—Jurisdiction and procedure of courts
Division 1—Introduction
185 Guide to this Part
This Part is about court jurisdiction and procedure.
Division 2 deals with civil proceedings. It confers jurisdiction on the Federal Court, the Federal Magistrates Court and State and Territory courts, subject to specified limits. It also contains rules about the transfer of civil proceedings between courts and other matters (such as when proceedings may be dealt with as small claims proceedings and when adverse cost orders can be made).
Division 3 deals with criminal proceedings. It confers criminal jurisdiction on the State and Territory courts and sets out the laws that are to be applied in relation to criminal proceedings.
Division 4 contains rules about proceedings generally (such as ASIC’s power to intervene in proceedings and the power of courts to punish for contempt).
Division 2—Civil proceedings
Subdivision A—Application of this Division
186 Application of this Division
(1) This Division applies to the exclusion of:
(a) the Jurisdiction of Courts (Cross‑vesting) Act 1987; and
(b) section 39B of the Judiciary Act 1903.
(2) This Division does not limit the application of the provisions of the Judiciary Act 1903 (other than section 39B). In particular, it does not limit the application of subsection 39(2) of that Act in relation to matters arising under this Act.
(3) Nothing in this Division affects any other jurisdiction of any court.
(4) Despite anything else in this Division, jurisdiction is conferred on the courts of a Territory only to the extent that the Constitution permits.
Subdivision B—Conferral of civil jurisdiction
187 Civil jurisdiction of courts
(1) Jurisdiction is conferred on a court referred to in an item in the following table in relation to civil matters arising under this Act, subject to the limits on the court’s jurisdiction (if any) specified in the item:
| Civil jurisdiction of courts |
| Item | Court on which civil jurisdiction is conferred | Limits of jurisdiction |
| 1 | The Federal Court | No specified limits. |
| 2 | The Federal Magistrates Court | The court does not have jurisdiction to award an amount for loss or damage that exceeds: (a) $750,000; or (b) if another amount is prescribed by the regulations—that other amount. |
| 3 | A superior court, or lower court, of a State or Territory | The court’s general jurisdictional limits, including limits as to locality and subject matter. |
(2) This section has effect subject to section 188.
188 Jurisdiction—decisions to prosecute and related criminal justice process decisions made by Commonwealth officers
(1) If a decision to prosecute a person for an offence against this Act has been made by an officer of the Commonwealth, and the prosecution is proposed to be brought in a court of a State or Territory:
(a) the Federal Court does not have jurisdiction in relation to any matter in which a person seeks a writ of mandamus or prohibition, or an injunction, against the officer in relation to that decision; and
(b) jurisdiction in relation to any such matter is conferred on the Supreme Court of the State or Territory in which the prosecution is proposed to be brought.
(2) Subject to subsection (4), at any time when:
(a) a prosecution for an offence against this Act is before a court of a State or Territory; or
(b) an appeal arising out of such a prosecution is before a court of a State or Territory;
the following apply:
(c) the Federal Court does not have jurisdiction in relation to any matter in which the person who is or was the defendant in the prosecution seeks a writ of mandamus or prohibition, or an injunction, against an officer of the Commonwealth in relation to a related criminal justice process decision;
(d) jurisdiction in relation to any such matter is conferred on the Supreme Court of the State or Territory in which the prosecution or appeal is before a court.
(3) A related criminal justice process decision, in relation to an offence, means a decision (other than a decision to prosecute) made in the criminal justice process in relation to the offence, including:
(a) a decision in connection with the investigation, committal for trial or prosecution of the defendant; and
(b) a decision in connection with the appointment of investigators or inspectors for the purposes of such an investigation; and
(c) a decision in connection with the issue of a warrant, including a search warrant or a seizure warrant; and
(d) a decision requiring the production of documents, the giving of information or the summoning of persons as witnesses; and
(e) a decision in connection with an appeal arising out of the prosecution.
(4) Subsection (2) does not apply if a person has applied for a writ of mandamus or prohibition, or an injunction, against an officer of the Commonwealth in relation to a related criminal justice process decision before the commencement of a prosecution for an offence against a law of the Commonwealth, or of a State or a Territory.
(5) If subsection (4) applies, the prosecutor may apply to the court for a permanent stay of the proceedings referred to in that subsection and the court may grant such a stay if the court determines that:
(a) the matters that are the subject of the proceedings are more appropriately dealt with in the criminal justice process; and
(b) a stay of proceedings will not substantially prejudice the person.
(6) Subsections (1), (2), (4) and (5) have effect despite anything in this Act or in any other law. In particular:
(a) neither this Act, nor any other law, has the effect of giving the Federal Court jurisdiction contrary to subsection (1) or (2); and
(b) neither section 9 of the Administrative Decisions (Judicial Review) Act 1977, nor any other law, has the effect of removing from the Supreme Court of a State or Territory the jurisdiction given to that court by subsection (1) or (2).
189 Cross‑jurisdictional appeals
The following table has effect:
| Cross‑jurisdictional appeals |
| Item | Despite any other law of the Commonwealth, an appeal in relation to a matter arising under this Act does not lie from a decision of ... | |