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National Consumer Credit Protection Act 2009

Authoritative Version
  • - C2012C00684
  • In force - Superseded Version
  • View Series
Act No. 134 of 2009 as amended, taking into account amendments up to Consumer Credit Legislation Amendment (Enhancements) Act 2012
An Act relating to credit, and for related purposes
Administered by: Treasury
Registered 27 Sep 2012
Start Date 18 Sep 2012
End Date 28 Feb 2013
Table of contents.

National Consumer Credit Protection Act 2009

Act No. 134 of 2009 as amended

This compilation was prepared on 19 September 2012
taking into account amendments up to Act No. 130 of 2012

The text of any of those amendments not in force
on that date is appended in the Notes section

The operation of amendments that have been incorporated may be
affected by application provisions that are set out in the Notes section

Prepared by the Office of Legislative Drafting and Publishing,
Attorney‑General’s Department, Canberra

  

  

  


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     16

6............ Meaning of credit activity.................................................................. 16

7............ Meaning of credit service.................................................................. 17

8............ Meaning of credit assistance............................................................ 17

9............ Meaning of acts as an intermediary................................................. 18

10.......... Assignees of credit providers, lessors, mortgagees and beneficiaries of a guarantee                18

Division 4—Other definitions                                                                                 20

11.......... Meaning of approved external dispute resolution scheme................ 20

12.......... When a business is carried on in this jurisdiction............................ 20

13.......... Meaning of misleading..................................................................... 20

14.......... Meaning of person—generally includes a partnership...................... 21

15.......... Meaning of person—generally includes multiple trustees................. 21

16.......... Qualified privilege............................................................................. 23

Part 1‑3—Application of this Act and the Transitional Act                      24

Division 1—Introduction                                                                                          24

17.......... Guide to this Part.............................................................................. 24

Division 2—Constitutional basis and application of this Act and the Transitional Act 25

18.......... Constitutional basis for this Act and the Transitional Act................. 25

19.......... Meaning of referring State................................................................ 26

20.......... Meaning of referred credit matter.................................................... 30

21.......... General application of this Act and the Transitional Act................... 30

22.......... When Acts bind Crown.................................................................... 31

Division 3—Interaction between the Commonwealth credit legislation and State and Territory laws                                                                                                                      32

23.......... Concurrent operation intended.......................................................... 32

24.......... When Commonwealth credit legislation does not apply.................... 32

25.......... Avoiding direct inconsistency between Commonwealth and State and Territory laws             33

26.......... Regulations to deal with interaction between laws............................ 34

Chapter 2—Licensing of persons who engage in credit activities          36

Part 2‑1—Requirement to be licensed to engage in credit activities      36

Division 1—Introduction                                                                                          36

27.......... Guide to this Part.............................................................................. 36

Division 2—Engaging in credit activities without a licence                   37

28.......... Application of this Division.............................................................. 37

29.......... Prohibition on engaging in credit activities without a licence............ 37

Division 3—Other prohibitions relating to the requirement to be licensed and to credit activities        39

30.......... Prohibitions on holding out and advertising etc................................ 39

31.......... Prohibition on conducting business with unlicensed persons........... 40

32.......... Prohibition on charging a fee etc....................................................... 40

33.......... Prohibition on giving misleading information etc.............................. 41

Part 2‑2—Australian credit licences                                                                         42

Division 1—Introduction                                                                                          42

34.......... Guide to this Part.............................................................................. 42

Division 2—Australian credit licences                                                               43

35.......... Australian credit licences................................................................... 43

Division 3—How to get an Australian credit licence                                 44

36.......... Applying for a licence....................................................................... 44

37.......... When a licence may be granted—applicants other than ADIs........... 44

38.......... When a licence may be granted—ADIs............................................ 46

39.......... Regulations may prescribe streamlined process for other applicants. 47

40.......... Licences must not be granted to certain applicants............................ 47

41.......... Applicant must be given hearing before refusal of licence................ 47

42.......... Notice of grant or refusal of licence and date of effect...................... 48

43.......... Australian credit licence numbers...................................................... 48

44.......... Basis on which licence is granted...................................................... 48

Division 4—Conditions on an Australian credit licence                           50

45.......... The conditions on the licence............................................................ 50

46.......... Licence conditions—special procedures for APRA‑regulated bodies 51

Division 5—Obligations of licensees                                                                   53

47.......... General conduct obligations of licensees........................................... 53

48.......... Requirements for compensation arrangements.................................. 54

49.......... Obligation to provide a statement or obtain an audit report if directed by ASIC       55

50.......... Obligation to give ASIC information required by the regulations..... 57

51.......... Obligation to provide ASIC with assistance if reasonably requested 58

52.......... Obligation to cite Australian credit licence number........................... 58

53.......... Obligation to lodge annual compliance certificate.............................. 59

Division 6—When a licence can be suspended, cancelled or varied  61

Subdivision A—Suspensions and cancellations                                                61

54.......... Suspension or cancellation without hearing...................................... 61

55.......... Suspension or cancellation after offering a hearing........................... 62

56.......... Suspension and cancellation—special procedures for APRA‑regulated bodies       63

Subdivision B—Variations                                                                                    64

57.......... Varying licences................................................................................ 64

Subdivision C—Miscellaneous rules about suspensions, cancellations and variations                64

58.......... Effect of suspension.......................................................................... 64

59.......... Revocation of suspension................................................................. 64

60.......... Date of effect, notice and publication of variation, cancellation or suspension etc.   64

61.......... Statement of reasons......................................................................... 65

62.......... ASIC may allow licence to continue in force.................................... 65

Part 2‑3—Credit representatives and other representatives of licensees 66

Division 1—Introduction                                                                                          66

63.......... Guide to this Part.............................................................................. 66

Division 2—Authorisation of credit representatives                                 67

64.......... Licensee may authorise credit representatives................................... 67

65.......... Credit representative that is a body corporate may sub‑authorise natural persons as credit representatives              68

66.......... Credit representative of 2 or more licensees...................................... 69

67.......... A person cannot be a credit representative in relation to credit activities authorised by a person’s licence               70

68.......... Variation and revocation of authorisations and sub‑authorisations... 70

69.......... Obligation not to give authorisation that has no effect....................... 71

70.......... Obligation to vary or revoke authorisation that ceases to have effect 71

71.......... Obligation to notify ASIC etc. about credit representatives............... 72

72.......... Credit representative numbers........................................................... 74

Division 3—Information about representatives                                           75

73.......... ASIC may give licensee information about representatives............... 75

Division 4—Liability of licensees for representatives                               78

74.......... Application of this Division.............................................................. 78

75.......... Responsibility if representative of only one licensee......................... 78

76.......... Representatives of multiple licensees................................................ 78

77.......... Responsibility extends to loss or damage suffered by client............. 79

78.......... Effect of this Division....................................................................... 79

Part 2‑4—Banning or disqualification of persons from engaging in credit activities       81

Division 1—Introduction                                                                                          81

79.......... Guide to this Part.............................................................................. 81

Division 2—Banning orders                                                                                    82

80.......... ASIC’s power to make a banning order............................................ 82

81.......... What is a banning order?.................................................................. 83

82.......... Effect of banning orders.................................................................... 84

83.......... Variation or cancellation of banning orders....................................... 84

84.......... Date of effect, notice and publication of banning order, variation or cancellation     85

85.......... Statement of reasons......................................................................... 86

Division 3—Disqualification by the court                                                        87

86.......... Disqualification by the court............................................................. 87

Part 2‑5—Financial records, trust accounts and audit reports                88

Division 1—Introduction                                                                                          88

87.......... Guide to this Part.............................................................................. 88

Division 2—Financial records of licensees                                                      89

88.......... Obligation to keep financial records.................................................. 89

89.......... How financial records are to be kept................................................. 90

90.......... Language of financial records........................................................... 90

91.......... Location of financial records............................................................. 90

92.......... Information to be shown in financial records.................................... 91

93.......... Regulations may impose additional requirements.............................. 91

94.......... Financial records taken to be made with licensee’s authority............ 92

95.......... Obligation to retain financial records for 7 years............................... 92

96.......... Financial records are prima facie evidence of matters........................ 92

Division 3—Trust accounts of credit service licensees                             94

97.......... Application of this Division.............................................................. 94

98.......... Obligation for credit service licensees to maintain trust account........ 94

99.......... Obligations in relation to trust account money.................................. 95

100........ Obligation to lodge trust account statement and trust account audit report                96

101........ Time of lodgment of trust account statement and trust account audit report              97

Division 4—Matters relating to audit reports                                               99

102........ Auditor’s right of access to records, information etc......................... 99

103........ Auditor’s fees and expenses........................................................... 100

104........ Auditor to report on certain matters................................................. 100

105........ Qualified privilege for auditor etc.................................................... 101

106........ Regulations in relation to audit reports etc....................................... 102

Part 2‑6—Exemptions and modifications relating to this Chapter      103

Division 1—Introduction                                                                                        103

107........ Guide to this Part............................................................................ 103

Division 2—Exemptions and modifications relating to this Chapter 104

108........ Provisions to which this Part applies.............................................. 104

109........ Exemptions and modifications by ASIC......................................... 104

110........ Exemptions and modifications by the regulations........................... 106

Chapter 3—Responsible lending conduct                                                           107

Part 3‑1—Licensees that provide credit assistance in relation to credit contracts              107

Division 1—Introduction                                                                                        107

111........ Guide to this Part............................................................................ 107

112........ Application of this Part................................................................... 108

Division 2—Credit guide of credit assistance providers                        109

113........ Credit guide of credit assistance providers...................................... 109

Division 3—Quote for providing credit assistance etc. in relation to credit contracts 112

114........ Quote for providing credit assistance etc......................................... 112

Division 4—Obligations of credit assistance providers before providing credit assistance for credit contracts                                                                                                114

115........ Obligations of credit assistance providers before providing credit assistance for credit contracts            114

116........ Preliminary assessment of unsuitability of the credit contract......... 115

117........ Reasonable inquiries etc. about the consumer................................. 115

118........ When the credit contract must be assessed as unsuitable—entering contract or increasing the credit limit               116

119........ When the credit contract must be assessed as unsuitable—remaining in credit contract           117

120........ Providing the consumer with the preliminary assessment............... 118

Division 5—Fees, commissions etc. relating to credit contracts        120

121........ Fees, commissions etc. relating to credit contracts.......................... 120

122........ No profiting from fees etc. paid to third parties............................... 121

Division 6—Prohibition on suggesting, or assisting with, unsuitable credit contracts   122

123........ Prohibition on suggesting or assisting consumers to enter, or increase the credit limit under, unsuitable credit contracts........................................................................................................ 122

124........ Prohibition on suggesting to consumers to remain in unsuitable credit contracts     123

Part 3‑2—Licensees that are credit providers under credit contracts: general rules       126

Division 1—Introduction                                                                                        126

125........ Guide to this Part............................................................................ 126

Division 2—Credit guide of credit providers                                               127

126........ Credit guide of credit providers....................................................... 127

127........ Credit guide of credit providers who are assignees......................... 128

Division 3—Obligations of credit providers before entering credit contracts or increasing credit limits                                                                                                                    130

128........ Obligations of credit providers before entering credit contracts or increasing credit limits       130

129........ Assessment of unsuitability of the credit contract........................... 130

130........ Reasonable inquiries etc. about the consumer................................. 130

131........ When credit contract must be assessed as unsuitable...................... 131

132........ Giving the consumer the assessment............................................... 132

Division 4—Prohibition on entering, or increasing the credit limit of, unsuitable credit contracts       134

133........ Prohibition on entering, or increasing the credit limit of, unsuitable credit contracts                134

Part 3‑2A—Licensees that are credit providers under credit contracts: additional rules relating to standard home loans                                                                                     136

Division 1—Introduction                                                                                        136

133A..... Guide to this Part............................................................................ 136

Division 2—Key Facts Sheets for standard home loans                        137

133AA.. What is a standard home loan?....................................................... 137

133AB.. What is a Key Facts Sheet for a standard home loan?...................... 137

133AC.. Credit provider’s website to provide capacity to generate Key Facts Sheet              138

133AD.. Credit provider to provide Key Facts Sheet in other situations........ 139

133AE... What if more information is needed from the consumer?................ 140

133AF... Defences to obligation to provide a Key Facts Sheet....................... 141

Part 3‑2B—Licensees that are credit providers under credit contracts: additional rules relating to credit card contracts                                                                                                    142

Division 1—Introduction                                                                                        142

133B..... Guide to this Part............................................................................ 142

Division 2—Credit card contracts and related concepts                       143

133BA.. Meaning of credit card contract etc................................................ 143

Division 3—Key Facts Sheets for credit card contract                          145

133BB... What is a Key Facts Sheet for a credit card contract?....................... 145

133BC... Application form for credit card contract to include up‑to‑date Key Facts Sheet      145

133BD.. Credit provider not to enter into credit card contract unless Key Facts Sheet has been provided etc.        146

Division 4—Offers etc. to increase credit limit of credit card contract                148

133BE... Credit provider not to offer etc. to increase credit limit of credit card contract          148

133BF... Informed consent of the consumer to the making of credit limit increase invitations                149

133BG.. Records of consents and withdrawals to be kept............................. 151

Division 5—Use of credit card in excess of credit limit                          152

133BH.. Credit provider to notify consumer of use of credit card in excess of credit limit     152

133BI.... Credit provider not to impose fees etc. because credit card used in excess of credit limit         152

133BJ.... Records of consents and withdrawals to be kept............................. 154

Division 6—Order of application of payments made under credit card contracts          155

133BO.. Credit provider to apply payments in accordance with this Division 155

133BP... Agreement to apply payment against particular amount owed......... 156

133BQ.. Application of payment against last statement balance, with higher interest debts to be discharged first  157

133BR... Application of any remaining part of the relevant payment............. 157

Part 3‑3—Licensees that provide credit assistance in relation to consumer leases             158

Division 1—Introduction                                                                                        158

134........ Guide to this Part............................................................................ 158

135........ Application of this Part................................................................... 159

Division 2—Credit guide of credit assistance providers                        160

136........ Credit guide of credit assistance providers...................................... 160

Division 3—Quote for providing credit assistance etc. in relation to consumer leases 163

137........ Quote for providing credit assistance etc......................................... 163

Division 4—Obligations of credit assistance providers before providing credit assistance for consumer leases                                                                                                       165

138........ Obligations of credit assistance providers before providing credit assistance for consumer leases          165

139........ Preliminary assessment of unsuitability of the consumer lease....... 166

140........ Reasonable inquiries etc. about the consumer................................. 166

141........ When the consumer lease must be assessed as unsuitable—entering lease               167

142........ When the consumer lease must be assessed as unsuitable—remaining in lease        168

143........ Providing the consumer with the preliminary assessment............... 169

Division 5—Fees, commissions etc. relating to consumer leases       171

144........ Fees, commissions etc. relating to consumer leases........................ 171

145........ No profiting from fees etc. paid to third parties............................... 172

Division 6—Prohibition on suggesting, or assisting with, unsuitable consumer leases  173

146........ Prohibition on suggesting, or assisting with, unsuitable consumer leases                173

147........ Prohibition on suggesting to consumers to remain in unsuitable consumer leases   174

Part 3‑4—Licensees that are lessors under consumer leases                   177

Division 1—Introduction                                                                                        177

148........ Guide to this Part............................................................................ 177

Division 2—Credit guide of lessors                                                                   178

149........ Credit guide of lessors.................................................................... 178

150........ Credit guide of lessors who are assignees....................................... 179

Division 3—Obligations of lessors before entering consumer leases 181

151........ Obligations of lessors before entering consumer leases.................. 181

152........ Assessment of unsuitability of the consumer lease......................... 181

153........ Reasonable inquiries etc. about the consumer................................. 181

154........ When consumer lease must be assessed as unsuitable.................... 182

155........ Giving the consumer the assessment............................................... 183

Division 4—Prohibition on entering unsuitable consumer leases      185

156........ Prohibition on entering unsuitable consumer leases........................ 185

Part 3‑5—Credit representatives                                                                              187

Division 1—Introduction                                                                                        187

157........ Guide to this Part............................................................................ 187

Division 2—Credit guide of credit representatives                                  188

158........ Credit guide of credit representatives.............................................. 188

Part 3‑6—Debt collectors                                                                                               191

Division 1—Introduction                                                                                        191

159........ Guide to this Part............................................................................ 191

Division 2—Credit guide of debt collectors                                                  192

160........ Credit guide of debt collectors......................................................... 192

Part 3‑7—Exemptions and modifications relating to this Chapter      194

Division 1—Introduction                                                                                        194

161........ Guide to this Part............................................................................ 194

Division 2—Exemptions and modifications relating to this Chapter 195

162........ Provisions to which this Part applies.............................................. 195

163........ Exemptions and modifications by ASIC......................................... 195

164........ Exemptions and modifications by the regulations........................... 196

Chapter 4—Remedies                                                                                                      197

Part 4‑1—Civil penalty provisions                                                                           197

Division 1—Introduction                                                                                        197

165........ Guide to this Part............................................................................ 197

Division 2—Declarations and pecuniary penalty orders for contraventions of civil penalty provisions                                                                                                                    198

166........ Declaration of contravention of civil penalty provision................... 198

167........ Court may order person to pay pecuniary penalty for contravening civil penalty provision     198

Division 3—General provisions relating to civil penalty provisions 200

168........ Contravening a civil penalty provision is not an offence................. 200

169........ Involvement in contravention treated in same way as actual contravention               200

170........ Civil evidence and procedure rules for proceedings relating to civil penalty provisions           200

171........ Criminal proceedings before civil proceedings................................ 200

172........ Criminal proceedings during civil proceedings............................... 200

173........ Criminal proceedings after civil proceedings................................... 201

174........ Evidence given in proceedings for pecuniary penalty not admissible in criminal proceedings  201

175........ Civil double jeopardy...................................................................... 201

Part 4‑2—Power of the court to grant remedies                                             202

Division 1—Introduction                                                                                        202

176........ Guide to this Part............................................................................ 202

Division 2—Power of the court to grant remedies                                   203

177........ Injunctions...................................................................................... 203

178........ Compensation orders...................................................................... 204

179........ Other orders to compensate loss or damage.................................... 205

180........ Orders in relation to unlawful credit activities................................. 207

181........ Preference must be given to compensate consumers....................... 208

182........ Adverse publicity orders................................................................. 209

183........ Relief from liability for contravention of civil penalty provision..... 209

184........ Multiple remedies may be granted................................................... 210

Part 4‑3—Jurisdiction and procedure of courts                                             211

Division 1—Introduction                                                                                        211

185........ Guide to this Part............................................................................ 211

Division 2—Civil proceedings                                                                              212

Subdivision A—Application of this Division                                                   212

186........ Application of this Division............................................................ 212

Subdivision B—Conferral of civil jurisdiction                                              212

187........ Civil jurisdiction of courts............................................................... 212

188........ Jurisdiction—decisions to prosecute and related criminal justice process decisions made by Commonwealth officers........................................................................................................ 213

189........ Cross‑jurisdictional appeals............................................................ 215

190........ Courts to act in aid of each other..................................................... 216

Subdivision C—Transfers between courts                                                       216

191........ Transfers—application of Subdivision............................................ 216

192........ Transfers—exercise of transfer power............................................ 217

193........ Transfers—criteria for transfer........................................................ 217

194........ Transfers—how initiated................................................................. 218

195........ Transfers—documents and procedure............................................. 218

196........ Transfers—conduct of proceedings................................................ 219

197........ Transfers—entitlement to practise as a lawyer................................ 219

198........ Transfers—limitation on appeals..................................................... 219

Subdivision D—Other matters                                                                            220

199........ Plaintiffs may choose small claims procedure................................. 220

200........ Costs only if proceedings brought vexatiously etc.......................... 224

201........ Civil proceedings not to be stayed................................................... 224

202........ Standard of proof in civil proceedings............................................ 224

Division 3—Criminal proceedings                                                                     226

Subdivision A—Application of this Division                                                   226

203........ Application of this Division............................................................ 226

Subdivision B—Conferral of criminal jurisdiction                                      226

204........ Criminal jurisdiction of courts......................................................... 226

205........ Criminal proceedings—laws to be applied...................................... 229

206........ Criminal proceedings—how taken.................................................. 229

207........ Certain persons to assist in prosecutions......................................... 230

208........ Privilege against self‑incrimination not available to bodies corporate in criminal proceedings 231

Division 4—Proceedings generally                                                                    232

209........ ASIC’s power to intervene in proceedings..................................... 232

210........ Evidence of contravention............................................................... 232

211........ Power of court to punish for contempt of court.............................. 233

Chapter 5—Administration                                                                                         234

Part 5‑1—Registers relating to credit activities                                                234

Division 1—Introduction                                                                                        234

212........ Guide to this Part............................................................................ 234

Division 2—Registers relating to credit activities                                     235

213........ Credit registers................................................................................ 235

214........ Inspection and public availability of credit registers........................ 236

Part 5‑2—Documents lodged with ASIC or required by this Act        237

Division 1—Introduction                                                                                        237

215........ Guide to this Part............................................................................ 237

Division 2—Lodgment of documents with ASIC                                        238

216........ When documents are lodged with ASIC......................................... 238

217........ Approved forms for documents to be lodged with ASIC............... 238

218........ ASIC may refuse to receive document etc....................................... 239

Division 3—ASIC’s register of documents                                                    241

219........ Register of documents lodged with ASIC....................................... 241

220........ ASIC may require person to give information for document registers 241

221........ Written document setting out information from document registers is prima facie evidence of matters    242

Division 4—Other provisions relating to documents lodged with ASIC or required under this Act     243

222........ Certified copy or extract of document lodged with ASIC is admissible in evidence 243

223........ ASIC may destroy or dispose of certain documents....................... 243

224........ Court may order lodgment of document etc.................................... 243

225........ Offences relating to documents lodged with ASIC etc.................... 244

Part 5‑3—Concealment or falsification of credit books                             247

Division 1—Introduction                                                                                        247

226........ Guide to this Part............................................................................ 247

Division 2—Prohibitions relating to the concealment or falsification of credit books   248

227........ Concealing etc. of credit books....................................................... 248

228........ Falsification of credit books............................................................ 249

229........ Precautions against falsification of credit books.............................. 250

Part 5‑4—Fees imposed by the National Consumer Credit Protection (Fees) Act 2009 251

Division 1—Introduction                                                                                        251

230........ Guide to this Part............................................................................ 251

Division 2—Fees imposed by the National Consumer Credit Protection (Fees) Act 2009          252

231........ Fees are payable to the Commonwealth.......................................... 252

232........ Lodgment of document without payment of fee.............................. 252

233........ Doing act without payment of fee................................................... 252

234........ Effect of sections 232 and 233........................................................ 252

235........ Waiver and refund of fees............................................................... 253

236........ Debts due to the Commonwealth.................................................... 253

237........ Payment of fee does not give right to inspect or search................... 253

Part 5‑5—Other administrative matters                                                               254

Division 1—Introduction                                                                                        254

238........ Guide to this Part............................................................................ 254

Division 2—Other administrative matters                                                    255

239........ ASIC has general administration of this Act................................... 255

240........ Obstructing or hindering ASIC etc................................................. 255

241........ Approved codes of conduct............................................................ 255

242........ ASIC may arrange for use of computer programs to make decisions 256

243........ Qualified privilege for information given to ASIC.......................... 257

244........ ASIC certificate is prima facie evidence of matters......................... 257

245........ Operator of approved external dispute resolution scheme may give information to ASIC       258

Chapter 6—Compliance and enforcement                                                         259

Part 6‑1—Investigations                                                                                                 259

Division 1—Introduction                                                                                        259

246........ Guide to this Part............................................................................ 259

Division 2—Investigations                                                                                     260

247........ General powers of investigation...................................................... 260

248........ Minister may direct investigations................................................... 260

249........ Interim report on investigation........................................................ 261

250........ Final report on investigation............................................................ 262

251........ Distribution of report...................................................................... 262

Part 6‑2—Examination of persons                                                                          264

Division 1—Introduction                                                                                        264

252........ Guide to this Part............................................................................ 264

Division 2—Examination of persons                                                                265

253........ Notice requiring appearance for examination.................................. 265

254........ Proceedings at examination............................................................. 265

255........ Requirements made of examinee..................................................... 265

256........ Examination to take place in private................................................ 266

257........ Examinee’s lawyer may attend........................................................ 266

258........ Record of examination.................................................................... 267

259........ Giving to other persons copies of record........................................ 267

260........ Copies given subject to conditions.................................................. 268

261........ Record to accompany report............................................................ 268

Part 6‑3—Inspection of books and audit information‑gathering powers                269

Division 1—Introduction                                                                                        269

262........ Guide to this Part............................................................................ 269

Division 2—Inspection of books and audit information‑gathering powers          270

263........ When certain powers may be exercised........................................... 270

264........ ASIC may inspect books without charge........................................ 270

265........ Notice to auditors concerning information and books..................... 271

266........ Notice to produce books about credit activities............................... 272

267........ Notice to produce documents in person’s possession..................... 273

268........ ASIC may authorise persons to require production of books, giving of information etc.         273

269........ Application for warrant to seize books not produced...................... 274

270........ Grant of warrant.............................................................................. 274

271........ Powers if books produced or seized............................................... 275

272........ Powers if books not produced........................................................ 277

Part 6‑4—Proceedings after an investigation                                                    278

Division 1—Introduction                                                                                        278

273........ Guide to this Part............................................................................ 278

Division 2—Proceedings after an investigation                                          279

274........ ASIC may prosecute....................................................................... 279

275........ ASIC may bring civil proceedings.................................................. 280

Part 6‑5—Hearings                                                                                                            281

Division 1—Introduction                                                                                        281

276........ Guide to this Part............................................................................ 281

Division 2—Hearings                                                                                                282

277........ Power to hold hearings................................................................... 282

278........ General discretion to hold hearing in public or private.................... 282

279........ Request by person appearing at hearing that it take place in public. 282

280........ Certain hearings to take place in private.......................................... 283

281........ ASIC may restrict publication of certain material............................ 283

282........ Who may be present when hearing takes place in private................ 283

283........ Involvement of person entitled to appear at hearing........................ 284

284........ Power to summon witnesses and take evidence.............................. 285

285........ Proceedings at hearings................................................................... 286

286........ ASIC to take account of evidence and submissions........................ 286

287........ Reference to court of question of law arising at hearing.................. 287

288........ Protection of ASIC members etc..................................................... 287

Part 6‑6—Offences                                                                                                            288

Division 1—Introduction                                                                                        288

289........ Guide to this Part............................................................................ 288

Division 2—Offences                                                                                                 289

290........ Contraventions of requirements made under this Chapter............... 289

291........ False information............................................................................ 290

292........ Obstructing person executing a warrant under this Chapter............ 290

293........ Disrupting hearings......................................................................... 291

294........ Concealing books relevant to investigation..................................... 291

295........ Self‑incrimination............................................................................ 292

296........ Legal professional privilege............................................................ 293

297........ Powers of court relating to contraventions of this Chapter.............. 294

Part 6‑7—ASIC’s powers in relation to contraventions of this Chapter  295

Division 1—Introduction                                                                                        295

298........ Guide to this Part............................................................................ 295

Division 2—ASIC’s powers in relation to contraventions of this Chapter          296

299........ Application of this Part................................................................... 296

300........ Orders by ASIC relating to credit contracts, mortgages, guarantees or consumer leases          296

301........ Orders under this Part..................................................................... 297

Part 6‑8—Evidentiary use of certain material                                                  298

Division 1—Introduction                                                                                        298

302........ Guide to this Part............................................................................ 298

Division 2—Evidentiary use of certain material                                        299

303........ Statements made at an examination: proceedings against examinee. 299

304........ Statements made at an examination: other proceedings................... 299

305........ Weight of evidence admitted under section 304.............................. 300

306........ Objection to admission of statements made at examination............. 301

307........ Copies of, or extracts from, certain books....................................... 302

308........ Report under Part 6‑1...................................................................... 302

309........ Exceptions to admissibility of report............................................... 303

310........ Material otherwise admissible......................................................... 304

Part 6‑9—Miscellaneous provisions relating to compliance and enforcement      305

Division 1—Introduction                                                                                        305

311........ Guide to this Part............................................................................ 305

Division 2—Miscellaneous provisions relating to compliance and enforcement               306

312........ Requirement made of a body corporate........................................... 306

313........ Evidence of authority...................................................................... 306

314........ Giving documents to natural persons.............................................. 306

315........ Place and time for production of books........................................... 307

316........ Application of Crimes Act and Evidence Act.................................. 307

317........ Allowances and expenses............................................................... 307

318........ Expenses of investigation under Part 6‑1........................................ 307

319........ Recovery of expenses of investigation............................................ 308

320........ Compliance with this Chapter......................................................... 309

321........ Effect of this Chapter...................................................................... 309

322........ Enforcement of undertakings.......................................................... 309

Chapter 7—Miscellaneous                                                                                            310

Part 7‑1—Miscellaneous                                                                                                 310

Division 1—Introduction                                                                                        310

323........ Guide to this Part............................................................................ 310

Division 2—Liability of persons for conduct of their agents etc.      311

324........ Liability for bodies corporate for conduct of their agents, employees etc.                311

325........ Liability of persons (other than bodies corporate) for the conduct of their agents, employees etc.           312

326........ Regulations for the purposes of this Division................................. 313

Division 3—Review of ASIC’s decisions                                                        314

327........ Review by Administrative Appeals Tribunal of decisions by ASIC under this Act 314

328........ Notice of reviewable decision and review rights............................. 315

Division 4—Regulations                                                                                          316

329........ Regulations..................................................................................... 316

330........ Regulations—where proceedings may be brought.......................... 316

331........ Regulations—infringement notices................................................. 316

Division 5—Other miscellaneous provisions                                                317

332........ Civil penalty provisions contravened or offences committed partly in and partly out of this jurisdiction 317

333........ Contravention of Act does not generally affect validity of transactions etc.              317

334........ Contracting out etc.......................................................................... 317

335........ Indemnities...................................................................................... 318

336........ Acquisition of property................................................................... 319

337........ Minister may delegate prescribed functions and powers under this Act 319

Schedule 1—National Credit Code                                                                         320

Part 1—Preliminary                                                                                                         320

1............ Short title......................................................................................... 320

2............ Interpretation generally.................................................................... 320

3............ Meaning of credit and amount of credit.......................................... 320

4............ Meaning of credit contract.............................................................. 321

5............ Provision of credit to which this Code applies................................ 321

6............ Provision of credit to which this Code does not apply.................... 322

7............ Mortgages to which this Code applies............................................ 326

8............ Guarantees to which this Code applies............................................ 326

9............ Goods leases with option to purchase to be regarded as sale by instalments            326

10.......... Deciding application of Code to particular contracts for the sale of land by instalments           328

11.......... Deciding application of Code to particular contracts for the sale of goods by instalments        329

12.......... Deciding application of Code to particular contracts for the sale of goods by instalments under related contracts   330

13.......... Presumptions relating to application of Code.................................. 330

13A....... Reverse mortgages.......................................................................... 332

Part 2—Credit contracts                                                                                                333

Division 1—Negotiating and making credit contracts                            333

14.......... Credit contract to be in form of written contract document.............. 333

15.......... Other forms of contract................................................................... 333

16.......... Precontractual disclosure................................................................. 334

17.......... Matters that must be in contract document...................................... 334

18.......... Form and expression of contract document..................................... 340

19.......... Alteration of contract document...................................................... 340

20.......... Copy of contract for debtor............................................................. 340

21.......... When debtor may terminate contract............................................... 340

22.......... Offence for noncompliance............................................................. 341

Division 2—Debtor’s monetary obligations                                                 342

23.......... Prohibited monetary obligations...................................................... 342

24.......... Offences related to prohibited monetary obligations....................... 342

25.......... Loan to be in money or equivalent.................................................. 343

26.......... Early payments and crediting of payments...................................... 343

26A....... Regulations about residential investment property.......................... 344

Division 3—Interest charges                                                                                345

27.......... Definitions relating to interest......................................................... 345

28.......... Limit on interest charges................................................................. 345

29.......... Early debit or payment of interest charges prohibited...................... 346

30.......... Default interest................................................................................ 346

30A....... Regulations about residential investment property.......................... 347

30B....... Regulations about credit card contracts........................................... 347

Division 4—Fees and charges                                                                              348

31.......... Prohibited credit fees or charges..................................................... 348

32.......... Fees or charges passed on to other parties...................................... 348

Division 5—Credit provider’s obligation to account                               349

33.......... Statements of account...................................................................... 349

34.......... Information to be contained in statements of account...................... 350

35.......... Opening balance must not exceed closing balance of previous statement 352

36.......... Statement of amount owing and other matters................................. 353

37.......... Court may order statement to be provided....................................... 354

38.......... Disputed accounts........................................................................... 354

39.......... Dating and adjustment of debits and credits in accounts................. 355

Division 6—Certain transactions not to be treated as contracts      356

40.......... Deferrals, waivers and changes under contracts.............................. 356

Part 3—Related mortgages and guarantees                                                      357

Division 1—Mortgages                                                                                            357

41.......... Application of Division................................................................... 357

42.......... Form of mortgage........................................................................... 357

43.......... Copy of mortgage for mortgagor.................................................... 357

44.......... Mortgages over all property void.................................................... 358

45.......... Restriction on mortgage of future property..................................... 358

46.......... Mortgages and continuing credit contracts...................................... 358

47.......... All accounts mortgages................................................................... 358

48.......... Third party mortgages prohibited.................................................... 359

49.......... Maximum amount which may be secured....................................... 359

50.......... Prohibited securities........................................................................ 360

51.......... Assignment or disposal of mortgaged property by mortgagor........ 361

52.......... Conditions on consent to assignment or disposal of property subject to mortgage   362

53.......... Offence for noncompliance............................................................. 362

Division 2—Guarantees                                                                                          364

54.......... Application of Division................................................................... 364

55.......... Form of guarantee........................................................................... 364

56.......... Disclosure....................................................................................... 364

57.......... Copies of documents for guarantor................................................. 364

58.......... Guarantor may withdraw before credit is provided......................... 365

59.......... Extension of guarantee.................................................................... 365

60.......... Limitation of guarantor’s liability.................................................... 366

61.......... Increase in guarantor’s liabilities..................................................... 367

62.......... Offence for noncompliance............................................................. 367

Part 4—Changes to obligations under credit contracts, mortgages and guarantees        369

Division 1—Unilateral changes by credit provider                                  369

63.......... Application of Division................................................................... 369

64.......... Interest rate changes........................................................................ 369

65.......... Repayment changes......................................................................... 371

66.......... Credit fees and charges changes...................................................... 372

67.......... Changes to credit limits etc. in continuing credit contracts.............. 373

68.......... Other unilateral changes by credit provider..................................... 373

69.......... Particulars of matters as changed only required to be given under this Division in certain cases             374

70.......... Prohibited increases in liabilities..................................................... 374

Division 2—Changes by agreement of parties                                            375

71.......... Changes by agreement.................................................................... 375

Division 3—Changes on grounds of hardship and unjust transactions  376

72.......... Changes on grounds of hardship.................................................... 376

73.......... Notice of change............................................................................. 377

74.......... Changes by court............................................................................ 378

75.......... Credit provider may apply for variation of change.......................... 378

76.......... Court may reopen unjust transactions............................................. 378

77.......... Orders on reopening of transactions............................................... 381

78.......... Court may review unconscionable interest and other charges......... 382

79.......... Applications by ASIC..................................................................... 383

80.......... Time limit........................................................................................ 383

81.......... Joinder of parties............................................................................. 384

Part 5—Ending and enforcing credit contracts, mortgages and guarantees         385

Division 1—Ending of credit contract by debtor etc.                              385

Subdivision A—Paying out contract etc.                                                          385

82.......... Debtor’s or guarantor’s right to pay out contract............................ 385

83.......... Statement of pay out figure............................................................. 385

84.......... Court may determine pay out figure if credit provider does not provide a pay out figure         386

85.......... Surrender of mortgaged goods and goods subject to sale by instalments 386

86.......... Compensation to debtor or mortgagor............................................. 389

Subdivision B—Ending of reverse mortgage by credit provider receiving value of reverse mortgaged property                                                                                                       389

86A....... Application of this Subdivision....................................................... 389

86B....... Discharge of debtor’s obligations under credit contract and discharge of mortgage 390

86C....... Credit provider must pay debtor excess of receipt over adjusted market value for reverse mortgaged property       390

86D....... Credit provider must not demand or accept further payments......... 390

86E........ Cases in which sections 86B, 86C and 86D do not apply............... 391

86F........ Relationship between this Subdivision and other provisions.......... 391

Subdivision C—Notice of first direct debit default                                        391

87.......... One‑off notice to be given the first time a direct debit default occurs 391

Division 2—Enforcement of credit contracts, mortgages and guarantees          393

88.......... Requirements to be met before credit provider can enforce credit contract or mortgage against defaulting debtor or mortgagor........................................................................................ 393

89.......... Defaults may be remedied............................................................... 396

90.......... Requirements to be met before credit provider can enforce guarantee against guarantor          396

91.......... Requirements to be met before credit provider can repossess mortgaged goods      397

92.......... Acceleration clauses........................................................................ 397

93.......... Requirements to be met before credit provider can enforce an acceleration clause    398

93A....... Extra requirements for enforcing reverse mortgage if debtor’s liability exceeded value of reverse mortgaged property........................................................................................................ 399

Division 3—Postponement of enforcement proceedings                        401

94.......... Postponement of exercise of rights................................................. 401

95.......... Effect of negotiated postponement.................................................. 402

96.......... Postponement by court.................................................................... 402

97.......... Credit provider may apply for variation of postponement order...... 403

Division 4—Enforcement procedures for goods mortgaged               404

98.......... Information as to location of mortgaged goods............................... 404

99.......... Entry to residential property to take possession of goods............... 404

100........ Court may order entry..................................................................... 405

101........ Order for possession....................................................................... 405

102........ Procedures to be followed by credit provider after taking possession of goods       405

103........ Mortgagor may nominate purchaser of goods taken by credit provider 406

104........ Sale of goods by credit provider..................................................... 407

105........ Matters for which account can be debited after mortgagee sale of goods 408

106........ Compensation to mortgagor............................................................ 408

Division 5—Enforcement expenses                                                                   409

107........ Recovery of enforcement expenses................................................. 409

Division 6—Mortgagor’s remedies                                                                   410

108........ Mortgagor may apply to regain possession of mortgaged goods.... 410

109........ Order for possession for mortgagor................................................ 410

110........ Ancillary or consequential orders.................................................... 411

Part 6—Penalties for defaults of credit providers                                         412

Division 1—Penalties for breach of key disclosure and other requirements      412

111........ Key requirements............................................................................ 412

112........ Application for order relating to key requirements.......................... 413

113........ Penalty may be imposed for contravention of key requirement....... 413

114........ Penalty if application made by debtor or guarantor......................... 415

115........ Payment of penalty to debtor or guarantor...................................... 415

116........ Penalty if application made by a credit provider or ASIC............... 416

117........ Payment of penalty.......................................................................... 416

118........ Compensation for debtor or guarantor............................................ 416

119........ General provisions relating to applications by credit providers or ASIC  417

120........ ASIC may represent interests of debtors......................................... 417

121........ Directions pending court’s decision................................................ 417

122........ Offences.......................................................................................... 418

123........ Time limit for application for orders under this Division................ 418

Division 2—Other penalties                                                                                  419

124........ Civil effect of other contraventions................................................. 419

Part 7—Related sale contracts                                                                                   420

Division 1—Interpretation and application                                                  420

125........ Meaning of sale contract................................................................ 420

126........ Sale contracts to which this Part applies.......................................... 420

127........ Linked credit providers and tied credit contracts............................. 420

Division 2—Liability of credit providers for suppliers’ misrepresentations       422

128........ Credit provider liable with respect to supplier’s misrepresentations etc. about tied credit contract           422

Division 3—Liability of credit providers in relation to goods            423

129........ Right to damages under sale contract against both supplier and linked credit provider (cf. section 73 of the Trade Practices Act 1974)......................................................................... 423

130........ Limits on debtor’s right of action against linked credit provider (cf. section 73 of the Trade Practices Act 1974)   424

131........ Liability of supplier to linked credit provider (cf. section 73 of the Trade Practices Act 1974)                426

132........ Interest may be awarded (cf. section 73 of the Trade Practices Act 1974)               427

133........ Subrogation of credit provider (cf. section 73 of the Trade Practices Act 1974)      427

Division 4—Termination of related transactions                                      428

134........ Termination of sale contract which is conditional on obtaining credit 428

135........ Termination of (or recredit under) tied credit contract if sale contract terminated      428

136........ Termination of linked maintenance services contract if credit contract terminated    430

137........ Termination of contract under this Part to be in writing.................. 431

138........ Powers of court with respect to termination of contract under this Part 431

139........ Part 5 not to apply to termination of contract under this Part........... 431

Division 5—Other provisions                                                                               432

140........ Requirement as to source of credit for goods or services................ 432

141........ Prohibition on payment for goods or services by postdated bills of exchange or notes which exceed cash price of goods or services....................................................................................... 432

Part 8—Related insurance contracts                                                                      433

142........ Interpretation and application.......................................................... 433

143........ Requirement to take out insurance or to insure with particular insurer or on particular terms   433

144........ Financing of insurance premiums over mortgaged property........... 434

145........ Commission for consumer credit insurance.................................... 435

146........ Supply of copy of credit‑related insurance contract by insurer........ 435

147........ Rejection of debtor’s proposal for insurance................................... 436

148........ Termination of consumer credit insurance contract if credit contract terminated       436

149........ Termination of insurance contract over mortgaged property if credit contract terminated         437

Part 9—Advertising and related conduct                                                            439

150........ Advertising..................................................................................... 439

151........ Persons liable for advertisements.................................................... 440

152........ Defence........................................................................................... 440

153........ Interest rates which may be disclosed............................................. 440

154........ False or misleading representations................................................. 441

155........ Harassment..................................................................................... 441

156........ Canvassing of credit at home.......................................................... 441

Part 10—Comparison rates                                                                                         442

Division 1—Preliminary                                                                                          442

157........ Object of Part.................................................................................. 442

158........ Part not to apply to continuing credit contracts................................ 442

159........ Definitions...................................................................................... 442

Division 2—Comparison rate in credit advertising                                  444

160........ Comparison rate mandatory in advertisements containing annual percentage rate    444

161........ The relevant comparison rate........................................................... 444

162........ Information about comparison rate.................................................. 444

163........ Warning about comparison rate....................................................... 445

164........ Other requirements for comparison rate.......................................... 445

Division 3—Comparison rate in other documents                                    446

165........ Comparison rates in documents other than credit advertising.......... 446

Division 4—Miscellaneous                                                                                     447

166........ Calculation of comparison rates...................................................... 447

167........ Compliance grace period following changes in interest or fees....... 447

168........ Regulations—exemptions and other matters................................... 447

Part 11—Consumer leases                                                                                            448

Division 1—Interpretation and application                                                  448

169........ Meaning of consumer lease............................................................ 448

170........ Consumer leases to which this Part applies..................................... 448

171........ Consumer leases to which this Part does not apply......................... 449

172........ Presumptions relating to application of this Part............................. 450

Division 2—Form of and information to be included in consumer leases             451

173........ Form of consumer lease.................................................................. 451

174........ Disclosures in consumer leases....................................................... 451

175........ Copy of lease etc. for lessee............................................................ 452

176........ Further goods and deferrals or waivers under consumer leases...... 452

Division 3—Other provisions applicable to consumer leases              454

177........ Application of certain Code provisions to consumer leases............ 454

178........ Notice of repossession.................................................................... 454

179........ Termination of lease........................................................................ 455

Part 12—Miscellaneous                                                                                                  456

Division 1—Tolerances and assumptions                                                       456

180........ Tolerances and assumptions relating to information........................ 456

181........ Tolerances relating to contracts and other documents...................... 457

182........ Regulations..................................................................................... 457

Division 2—Documentary provisions                                                              458

183........ Form of notices............................................................................... 458

184........ Legibility and language................................................................... 458

185........ Copies of contracts and other documents........................................ 459

186........ Signing of documents..................................................................... 459

187........ Electronic transactions and documents............................................ 460

Division 3—General provisions                                                                          461

188........ Assignment by credit provider........................................................ 461

189........ Assignment by debtor, mortgagor or guarantor.............................. 461

190........ Appropriation of payments............................................................. 461

191........ Contracting out................................................................................ 462

192........ Indemnities...................................................................................... 462

193........ Effect of noncompliance.................................................................. 463

194........ Giving notice or other document..................................................... 463

195........ Manner of giving notice or other document.................................... 465

196........ Date of notice or other document.................................................... 466

197........ Extensions of time........................................................................... 466

198........ Orders of court................................................................................ 466

199........ Conduct of agents and related matters............................................. 466

Division 4—Provisions relating to offences                                                  468

200........ Offences by officers, agents or employees...................................... 468

201........ Offences by corporations................................................................ 468

202........ Limitations...................................................................................... 468

203........ Application of section 4K of the Crimes Act 1914.......................... 468

Division 5—Exemptions from this Code                                                         469

203A..... Exemptions by ASIC...................................................................... 469

203B..... Exemptions by the regulations........................................................ 469

Part 13—Principal definitions                                                                                    470

204........ Principal definitions........................................................................ 470

Part 14—Miscellaneous provisions relating to interpretation                 480

Division 1—Preliminary                                                                                          480

205........ Displacement of Part by contrary intention..................................... 480

Division 2—General                                                                                                  481

206........ Material that is, and is not, part of this Code................................... 481

207........ References to particular Acts and to enactments.............................. 481

208........ Compliance with forms................................................................... 481

Division 3—Terms and references                                                                    483

209........ Provisions relating to defined terms and gender and number.......... 483

210........ Meaning of may and must etc......................................................... 483

211........ Effect of express references to bodies corporate and individuals.... 483

212........ Reference to certain provisions of Code.......................................... 484

213........ Reference to provisions of this Code or an Act is inclusive............ 484

Division 4—Functions and powers                                                                    485

214........ Power to make instrument or decision includes power to amend or repeal               485

215........ Matters for which statutory instruments may make provision......... 485

216........ Presumption of validity and power to make.................................... 486

217........ Exercise of powers between enactment and commencement........... 487

Division 5—Distance, time and age                                                                   490

218........ Matters relating to distance, time and age........................................ 490

Notes                                                                                                                                           491


An Act relating to credit, and for related purposes

Chapter 1Introduction

Part 1‑1Introduction

  

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 1‑2Definitions

Division 1Introduction

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 2The 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.

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

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:          Section 2B 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.

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

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 card: see subsection 133BA(2).

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

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

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; 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.

Key Facts Sheet:

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

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

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).

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

lodge with ASIC: see section 216.

lower court means:

                     (a)  the Federal 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.

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

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

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

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.

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

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

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

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

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

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

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

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

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

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

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.

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

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 3Definitions relating to the meaning of credit activity

6  Meaning of credit activity

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

 

Meaning of credit activity

Item

Topic

A person engages in a credit activity if:

1

credit contracts

(a) the person is a credit provider under a credit contract; or

(b) the person carries on a business of providing credit, being credit the provision of which the National Credit Code applies to; or

(c)  the person performs the obligations, or exercises the rights, of a credit provider in relation to a credit contract or proposed credit contract (whether the person does so as the credit provider or on behalf of the credit provider); or

2

credit service

the person provides a credit service; or

3

consumer leases

(a) the person is a lessor under a consumer lease; or

(b) the person carries on a business of providing consumer leases; or

(c)  the person performs the obligations, or exercises the rights, of a lessor in relation to a consumer lease or proposed consumer lease (whether the person does so as the lessor or on behalf of the lessor); or

4

mortgages

(a) the person is a mortgagee under a mortgage; or

(b) the person performs the obligations, or exercises the rights, of a mortgagee in relation to a mortgage or proposed mortgage (whether the person does so as the mortgagee or on behalf of the mortgagee); or

5

guarantees

(a) the person is the beneficiary of a guarantee; or

(b) the person performs the obligations, or exercises the rights, of another person who is a beneficiary of a guarantee or proposed guarantee, in relation to the guarantee or proposed guarantee (whether the person does so on the person’s own behalf or on behalf of the other person); or

6

prescribed activities

the person engages in an activity prescribed by the regulations in relation to credit, being credit the provision of which the National Credit Code applies to, or would apply to if the credit were provided.

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

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

7  Meaning of credit service

                   A person provides a credit service if the person:

                     (a)  provides credit assistance to a consumer; or

                     (b)  acts as an intermediary.

8  Meaning of credit assistance

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

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

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

                     (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 4Other 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 1‑3Application of this Act and the Transitional Act

Division 1Introduction

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

18  Constitutional basis for this Act and the Transitional Act

Application in a referring State

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

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

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

Application in a Territory

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

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

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

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

Application outside Australia

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

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

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

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

Application in a non‑referring State

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

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

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

19  Meaning of referring State

Meaning of referring State

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

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

                     (b)  has:

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

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

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

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

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

                     (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 3Interaction 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 2Licensing of persons who engage in credit activities

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

Division 1Introduction

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 2Engaging 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 3Other 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 2‑2Australian credit licences

Division 1Introduction

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 2Australian 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 3How 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 4Conditions 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 5Obligations 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 6When a licence can be suspended, cancelled or varied

Subdivision ASuspensions 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 BVariations

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 CMiscellaneous 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 2‑3Credit representatives and other representatives of licensees

Division 1Introduction

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 2Authorisation 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 3Information 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 4Liability 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 2‑4Banning or disqualification of persons from engaging in credit activities

Division 1Introduction

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 2Banning 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 3Disqualification 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 2‑5Financial records, trust accounts and audit reports

Division 1Introduction

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 2Financial 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 3Trust 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 4Matters 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 2‑6Exemptions and modifications relating to this Chapter

Division 1Introduction

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 2Exemptions 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 3Responsible lending conduct

Part 3‑1Licensees that provide credit assistance in relation to credit contracts

Division 1Introduction

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 2Credit 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 3Quote 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 4Obligations 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 5Fees, 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 6Prohibition 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 3‑2Licensees that are credit providers under credit contracts: general rules

Division 1Introduction

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 2Credit 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 3Obligations 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 4Prohibition 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 3‑2ALicensees that are credit providers under credit contracts: additional rules relating to standard home loans

Division 1Introduction

133A  Guide to this Part

This Part has rules that apply to licensees that are credit providers under standard home loans. It applies in addition to the general rules in Part 3‑2.

Division 2 imposes requirements aimed at ensuring a consumer can obtain a Key Facts Sheet for a standard home loan.


 

Division 2Key Facts Sheets for standard home loans

133AA  What is a standard home loan?

             (1)  A standard home loan of a licensee is a standard form of credit contract under which the licensee provides credit:

                     (a)  to purchase residential property; or

                     (b)  to refinance credit that has been provided wholly or predominantly to purchase residential property.

             (2)  The regulations may make provisions that apply to determining, for the purpose of subsection (1), whether a credit contract is a standard form of credit contract.

133AB  What is a Key Facts Sheet for a standard home loan?

             (1)  A Key Facts Sheet for a standard home loan is a document:

                     (a)  that contains the information relating to the standard home loan that is required by the regulations; and

                     (b)  that complies with any other requirements prescribed by the regulations.

             (2)  Without limiting paragraph (1)(a), regulations made for the purpose of that paragraph:

                     (a)  may require a Key Facts Sheet for a standard home loan to contain information:

                              (i)  that is specific to the consumer by whom the Key Facts Sheet is to be generated under section 133AC or to whom it is to be provided under section 133AD; and

                             (ii)  that relates to the cost or implications of the loan for the consumer; and

                     (b)  may require information contained in a Key Facts Sheet for a standard home loan to be based on either or both of the following:

                              (i)  information provided by the consumer;

                             (ii)  particular assumptions.

133AC  Credit provider’s website to provide capacity to generate Key Facts Sheet

When this section applies

             (1)  This section applies if a licensee has a website that can be used by a consumer to apply for, or make an inquiry about, one or more standard home loans of the licensee.

Requirement

             (2)  The licensee must ensure that the website satisfies all of the following paragraphs:

                     (a)  the website tells the consumer that the consumer may use the website to generate a Key Facts Sheet for the standard home loan, or for each of the standard home loans;

                     (b)  the website:

                              (i)  tells the consumer what information the consumer will need to enter in order to generate the Key Facts Sheet or Sheets; and

                             (ii)  provides the consumer with instructions on how to generate the Key Facts Sheet or Sheets;

                     (c)  if the consumer enters the information and follows those instructions, the consumer can use the website to generate the Key Facts Sheet or Sheets, containing up‑to‑date information, in a form that can be printed;

                     (d)  the website complies with any other requirements prescribed by the regulations.

Civil penalty:          2,000 penalty units.

Offence

             (3)  A person commits an offence if:

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

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    50 penalty units.

133AD  Credit provider to provide Key Facts Sheet in other situations

When this section applies

             (1)  This section applies if:

                     (a)  either:

                              (i)  a consumer makes a request to a licensee (otherwise than by using a website of the licensee) to be provided with a Key Facts Sheet for one or more standard home loans of the licensee that are specified in the request; or

                             (ii)  the regulations require a consumer, in circumstances prescribed by the regulations, to be provided with a Key Facts Sheet for one or more standard home loans of a licensee; and

                     (b)  the consumer has given the licensee the consumer’s name, and the contact details required by the regulations.

Requirement

             (2)  The licensee must, in accordance with any requirements prescribed by the regulations:

                     (a)  provide the consumer with a Key Facts Sheet containing up‑to‑date information for the standard home loan, or for each of the standard home loans; and

                     (b)  provide the consumer with any other information relating to other standard home loans of the licensee that is required by the regulations.

Note:          Subsection 133AE(4) and section 133AF provide defences to liability under this subsection.

Civil penalty:          2,000 penalty units.

Offence

             (3)  A person commits an offence if:

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

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    50 penalty units.

Note:          Subsection 133AE(4) and section 133AF provide defences to liability under this subsection.

133AE  What if more information is needed from the consumer?

When this section applies

             (1)  This section applies if:

                     (a)  a licensee is required by section 133AD to provide a consumer with a Key Facts Sheet for a standard home loan; but

                     (b)  the licensee does not have all the information from the consumer that the licensee needs in order to be able to prepare the Key Facts Sheet.

Requirement

             (2)  The licensee must, in accordance with any requirements prescribed by the regulations, tell the consumer what information the licensee needs in order to be able to prepare the Key Facts Sheet.

Civil penalty:          2,000 penalty units.

Offence

             (3)  A person commits an offence if:

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

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    50 penalty units.

Defence for subsections 133AD(2) and (3)

             (4)  For the purposes of applying subsections 133AD(2) and (3) to a failure by a licensee to provide a Key Facts Sheet to a consumer, it is a defence if:

                     (a)  the licensee has, in accordance with subsection (2) of this section, told the consumer what information the licensee needs in order to be able to prepare the Key Facts Sheet; and

                     (b)  the consumer has not provided that information to the licensee.

Note:          For the purpose of subsection 133AD(3), a defendant bears an evidential burden in relation to the matter in this subsection (see subsection 13.3(3) of the Criminal Code).

133AF  Defences to obligation to provide a Key Facts Sheet

             (1)  For the purpose of applying subsection 133AD(2) or (3) to a failure by a licensee to provide a consumer with a Key Facts Sheet (the new Key Facts Sheet) for a standard home loan, it is a defence if:

                     (a)  the following conditions are satisfied:

                              (i)  the licensee has previously provided the consumer with a Key Facts Sheet (the previous Key Facts Sheet) for the standard home loan;

                             (ii)  the new Key Facts Sheet would be the same (except for its date) as the previous Key Facts Sheet; or

                     (b)  the licensee reasonably believes that:

                              (i)  another person has previously provided the consumer with a Key Facts Sheet (the previous Key Facts Sheet) for the standard home loan; and

                             (ii)  the new Key Facts Sheet would be the same (except for its date) as the previous Key Facts Sheet; or

                     (c)  the licensee reasonably believes that the consumer would not be eligible for the standard home loan; or

                     (d)  under regulations made for the purpose of subsection (2), the licensee is not required to provide the consumer with the new Key Facts Sheet.

Note:          For the purpose of subsection 133AD(3), a defendant bears an evidential burden in relation to the matters in this subsection (see subsection 13.3(3) of the Criminal Code).

             (2)  The regulations may prescribe circumstances in which a licensee is not required to provide a consumer with a Key Facts Sheet for a standard home loan.


 

Part 3‑2BLicensees that are credit providers under credit contracts: additional rules relating to credit card contracts

Division 1Introduction

133B  Guide to this Part

This Part has rules that apply to licensees that are credit providers under credit card contracts. It applies in addition to the general rules in Part 3‑2.

Division 2 defines key concepts used in this Part (including credit card contract and credit card).

Division 3 imposes requirements aimed at ensuring a consumer obtains a Key Facts Sheet before entering into a credit card contract.

Division 4 imposes restrictions on a licensee making offers etc. to increase the credit limit of a credit card contract.

Division 5 provides for consumers to be notified if a credit card is used in excess of its credit limit, and restricts the charging of fees etc. for use of a credit card in excess of its credit limit.

Division 6 imposes requirements relating to the order of application of payments made under credit card contracts. Generally, a payment must be applied against higher interest rate debts first.


 

Division 2Credit card contracts and related concepts

133BA  Meaning of credit card contract etc.

Meaning of credit card contract

             (1)  A credit card contract is a continuing credit contract under which credit is ordinarily obtained only by the use of a credit card.

Meaning of credit card

             (2)  A credit card is:

                     (a)  a card of a kind commonly known as a credit card; or

                     (b)  a card of a kind that persons carrying on business commonly issue to their customers, or prospective customers, for use in obtaining goods or services from those persons on credit; or

                     (c)  anything else that may be used as a card referred to in paragraph (a) or (b).

Meaning of linked to a credit card contract

             (3)  A credit card is linked to a credit card contract if:

                     (a)  the credit card is issued under or in relation to the contract; and

                     (b)  the credit card can be used to obtain credit under the contract as referred to in subsection (1).

Meaning of use of a credit card

             (4)  A reference to the use of a credit card to obtain cash, goods or services includes a reference to the use or provision of the number of the credit card to obtain cash, goods or services.

Articles that can be used as credit cards and in other ways

             (5)  If a credit card can also be used in other ways (for example, as a debit card, or to access other accounts):

                     (a)  the article is a credit card (despite the fact that it can also be used in those other ways); but

                     (b)  the provisions of this Act that are expressed to apply in relation to credit cards do not apply to the article in so far as it can be used in those other ways.


 

Division 3Key Facts Sheets for credit card contract

133BB  What is a Key Facts Sheet for a credit card contract?

                   A Key Facts Sheet for a credit card contract is a document:

                     (a)  that contains the information relating to the contract that is required by the regulations; and

                     (b)  that complies with any other requirements prescribed by the regulations.

133BC  Application form for credit card contract to include up‑to‑date Key Facts Sheet

Requirement

             (1)  If a licensee makes available to consumers an application form that can be used to apply for a credit card contract under which the licensee would be the credit provider, the licensee must ensure that the application form includes a Key Facts Sheet for the contract that contains up‑to‑date information.

Civil penalty:          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.

Circumstances in which application form may, for limited period, include out‑of‑date Key Facts Sheet

             (3)  The regulations may prescribe circumstances in which a licensee may, for a period prescribed by the regulations, make available an application form that includes a Key Facts Sheet containing information that has ceased to be up‑to‑date.

Note:          If a consumer applies using such an application form, the consumer must be given the up‑to‑date information: see paragraph 133BD(1)(b).

             (4)  If a licensee makes available an application form that includes a Key Facts Sheet containing information that has ceased to be up‑to‑date, it is a defence for the purposes of subsections (1) and (2) if the application form was made available as permitted by regulations made for the purpose of subsection (3).

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

133BD  Credit provider not to enter into credit card contract unless Key Facts Sheet has been provided etc.

Requirement

             (1)  If a consumer applies to a licensee for a credit card contract under which the licensee would be the credit provider, the licensee must not enter into, or offer to enter into, the contract unless:

                     (a)  the application is made using an application form that includes a Key Facts Sheet for the contract that contains up‑to‑date information; or

                     (b)  the following conditions are satisfied:

                              (i)  the application is made using an application form that includes a Key Facts Sheet for the contract that contains information that has ceased to be up‑to‑date;

                             (ii)  the consumer has been provided with the up‑to‑date information in accordance with any requirements prescribed by the regulations; or

                     (c)  the consumer has otherwise been provided with a Key Facts Sheet for the contract that contains up‑to‑date information in accordance with any requirements prescribed by the regulations.

Civil penalty:          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.


 

Division 4Offers etc. to increase credit limit of credit card contract

133BE  Credit provider not to offer etc. to increase credit limit of credit card contract

Requirement

             (1)  A licensee who is the credit provider under a credit card contract must not make a credit limit increase invitation in relation to the contract.

Civil penalty:          2,000 penalty units.

Note 1:       Subsection 133BF(1) provides a defence to liability under this subsection.

Note 2:       For other provisions that must be complied with in relation to increasing credit limits, see:

(a)    Divisions 3 and 4 of Part 3‑2; and

(b)    subsection 67(4) of the National Credit Code.

Offence

             (2)  A person commits an offence if:

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

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    100 penalty units.

Note:          Subsection 133BF(1) provides a defence to liability under this subsection.

Strict liability offence

             (3)  A person commits an offence if:

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

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    10 penalty units.

Note:          Subsection 133BF(1) provides a defence to liability under this subsection.

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

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

Meaning of credit limit increase invitation

             (5)  A licensee makes a credit limit increase invitation, in relation to a credit card contract, if:

                     (a)  the licensee gives a written communication that relates to the contract to the consumer who is the debtor under the contract; and

                     (b)  one or more of the following conditions is satisfied in relation to the communication:

                              (i)  the communication offers to increase the credit limit of the contract;

                             (ii)  the communication invites the consumer to apply for an increase of the credit limit of the contract;

                            (iii)  the licensee gave the communication to the consumer for the purpose (or for purposes including the purpose) of encouraging the consumer to consider applying for an increase of the credit limit of the contract.

             (6)  The regulations may make provisions that apply to determining whether a written communication is covered by the definition in subsection (5).

133BF  Informed consent of the consumer to the making of credit limit increase invitations

             (1)  For the purposes of applying subsections 133BE(1), (2) and (3) to the making of a credit limit increase invitation, it is a defence if:

                     (a)  the licensee has, in accordance with this section, obtained express consent, from the consumer who is the debtor under the credit card contract, to the licensee making credit limit increase invitations; and

                     (b)  the consent has not been withdrawn in accordance with this section.

Note 1:       The consent must be express, and cannot be implied from the actions of the consumer or from other circumstances.

Note 2:       The licensee must keep records of consents and withdrawals: see section 133BG.

Note 3:       For the purposes of subsections 133BE(2) and (3), a defendant bears an evidential burden in relation to the matter in this subsection (see subsection 13.3(3) of the Criminal Code).

             (2)  The consumer may consent to the licensee making credit limit increase invitations.

             (3)  The consent must be expressed to relate to any credit limit increase invitations that the licensee may, from time to time, make to the consumer.

Note:          A consent expressed in more limited terms is not effective for the purpose of this section.

             (4)  Before obtaining the consumer’s consent, the licensee must inform the consumer of the following matters:

                     (a)  that the consumer has a discretion whether to apply for any increase of the credit limit;

                     (b)  that the licensee has a discretion whether to grant any increase applied for;

                     (c)  that the consumer may withdraw the consent at any time;

                     (d)  any other matters prescribed by the regulations.

             (5)  The consent may be obtained before or after the credit card contract is entered into, but it does not cover any credit limit increase invitation made before the consent is obtained.

             (6)  The consumer may withdraw the consent at any time.

             (7)  The regulations may prescribe requirements to be complied with in relation to any of the following:

                     (a)  giving consent under subsection (2) or withdrawing consent under subsection (6);

                     (b)  informing the consumer of matters under subsection (4).

133BG  Records of consents and withdrawals to be kept

Requirement

             (1)  A licensee must, in accordance with the requirements prescribed by the regulations, keep a record of:

                     (a)  consents the licensee obtains under section 133BF; and

                     (b)  withdrawals of such consents.

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.


 

Division 5Use of credit card in excess of credit limit

133BH  Credit provider to notify consumer of use of credit card in excess of credit limit

Regulations may require licensee to notify consumer of use of credit card in excess of credit limit

             (1)  The regulations may require a licensee who is the credit provider under a credit card contract to notify the consumer who is the debtor under the contract if the licensee becomes aware that the debtor has used a credit card that is linked to the contract to obtain cash, goods or services in excess of the credit limit for the contract.

             (2)  Without limiting subsection (1), regulations made for the purpose of that subsection may deal with:

                     (a)  how and when the licensee must notify the consumer; and

                     (b)  the matters that must be included in the notification.

Requirement to comply with the regulations

             (3)  A licensee must comply with regulations made for the purpose of subsection (1).

Civil penalty:          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 conduct contravenes the requirement.

Criminal penalty:    50 penalty units.

133BI  Credit provider not to impose fees etc. because credit card used in excess of credit limit

             (1)  If a credit card is used to obtain cash, goods or services in excess of the credit limit for the credit card contract, the licensee who is the credit provider under the contract must not, because the credit limit was exceeded, impose any liability to pay fees or charges, or a higher rate of interest, on the consumer who is the debtor under the contract unless:

                     (a)  the licensee has, in accordance with this section, obtained express consent from the consumer covering the imposition of the fees or charges, or the higher rate of interest; and

                     (b)  the consent has not been withdrawn; and

                     (c)  any other requirements prescribed by the regulations are complied with.

Note 1:       The consent must be express, and cannot be implied from the actions of the consumer or from other circumstances.

Note 2:       The licensee must keep records of consents and withdrawals: see section 133BJ.

             (2)  The consumer may consent to the licensee imposing a liability to pay fees or charges, or a higher rate of interest, if the credit card is used to obtain cash, goods or services in excess of the credit limit.

             (3)  Before obtaining the consumer’s consent, the licensee must, in accordance with the regulations, inform the consumer of any matters prescribed by the regulations.

             (4)  The consent may be obtained before or after the credit card contract is entered into, but it does not cover any fees, charges or interest imposed before the consent is obtained.

             (5)  The consumer may withdraw the consent at any time.

             (6)  The regulations may prescribe requirements to be complied with in relation to giving consent under subsection (2), or withdrawing consent under subsection (5).

             (7)  For the purpose of subsection 23(1) of the National Credit Code (and the other provisions of the Code that refer to, or apply in relation to, that subsection):

                     (a)  a liability to pay a fee or charge that is imposed contrary to subsection (1) of this section is taken to be a credit fee or charge that is prohibited by the Code; and

                     (b)  a liability to pay interest that is imposed contrary to subsection (1) of this section is taken to be an interest charge under the credit card contract exceeding the amount that may be charged consistently with the Code.

Note:          For the civil and criminal consequences of contravening subsection 23(1) of the National Credit Code, see subsections 23(2) to (4), section 24, and Part 6, of the Code.

133BJ  Records of consents and withdrawals to be kept

Requirement

             (1)  A licensee must, in accordance with the requirements prescribed by the regulations, keep a record of:

                     (a)  consents the licensee obtains under section 133BI; and

                     (b)  withdrawals of such consents.

Civil penalty:          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.


 

Division 6Order of application of payments made under credit card contracts

133BO  Credit provider to apply payments in accordance with this Division

Requirement

             (1)  If a payment (the relevant payment) is made under a credit card contract:

                     (a)  by or on behalf of the consumer who is the debtor under the contract; and

                     (b)  to the licensee who is the credit provider under the contract;

the licensee must apply the payment in accordance with this Division (despite any provision to the contrary in the contract, any other contract or instrument or any other law).

Civil penalty:          2,000 penalty units.

             (2)  To avoid doubt, an amount:

                     (a)  that is credited to the consumer’s account by the licensee; and

                     (b)  that is, or is in the nature of:

                              (i)  a total or partial refund in relation to a transaction entered into using the credit card; or

                             (ii)  a total or partial reversal of such a transaction;

is not a payment to which subsection (1) applies.

Offence

             (3)  A person commits an offence if:

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

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    100 penalty units.

Strict liability offence

             (4)  A person commits an offence if:

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

                     (b)  the person engages in conduct; and

                     (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.

133BP  Agreement to apply payment against particular amount owed

             (1)  This section applies if, at the time when the licensee applies the relevant payment, the following conditions are satisfied:

                     (a)  the consumer has requested the licensee to apply certain payments made under the credit card contract against a particular amount:

                              (i)  owed by the consumer to the licensee under the contract; and

                             (ii)  in relation to which any other requirements prescribed by the regulations are satisfied;

                     (b)  the licensee has agreed to the request;

                     (c)  the relevant payment is a payment to which the request relates;

                     (d)  neither the request, nor the agreement to the request, has been withdrawn in accordance with this section.

             (2)  The licensee must apply the relevant payment against the amount referred to in paragraph (1)(a) in accordance with the request.

             (3)  The consumer may withdraw the request at any time.

             (4)  The licensee may withdraw the agreement to the request, but only if the consumer has consented to the withdrawal.

             (5)  The regulations may prescribe requirements to be complied with in relation to any of the following:

                     (a)  making a request under paragraph (1)(a);

                     (b)  agreeing to a request under paragraph (1)(b);

                     (c)  withdrawing a request under subsection (3);

                     (d)  withdrawing agreement to a request under subsection (4);

                     (e)  consenting under subsection (4) to the withdrawal of agreement to a request.

133BQ  Application of payment against last statement balance, with higher interest debts to be discharged first

             (1)  Subject to subsection (2), the licensee must apply the relevant payment (or any part of the relevant payment remaining after complying with section 133BP) against so much as remains owing of the closing balance shown in the last statement of account for the credit card contract that the licensee gave the consumer before the relevant payment was made.

             (2)  If different annual percentage rates apply to different parts of that closing balance, the licensee must apply the relevant payment (or any remaining part of the payment) first to the part of that balance to which the highest rate applies, next to the part of that balance to which the next highest rate applies, and so on.

133BR  Application of any remaining part of the relevant payment

                   The licensee must apply any part of the relevant payment remaining after complying with sections 133BP and 133BQ in accordance with the terms of the credit card contract.


 

Part 3‑3Licensees that provide credit assistance in relation to consumer leases

Division 1Introduction

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 2Credit 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 3Quote 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 4Obligations 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 5Fees, 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 6Prohibition 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 3‑4Licensees that are lessors under consumer leases

Division 1Introduction

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 2Credit 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 3Obligations 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 4Prohibition 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 3‑5Credit representatives

Division 1Introduction

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 2Credit 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 3‑6Debt collectors

Division 1Introduction

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 2Credit 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 3‑7Exemptions and modifications relating to this Chapter

Division 1Introduction

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 2Exemptions 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 4Remedies

Part 4‑1Civil penalty provisions

Division 1Introduction

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 2Declarations 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 3General 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 4‑2Power of the court to grant remedies

Division 1Introduction

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 2Power 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 4‑3Jurisdiction and procedure of courts

Division 1Introduction

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 2Civil proceedings

Subdivision AApplication 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 BConferral 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 ...

to any of the following courts:

1

the Federal Court

(a) a court of a State;

(b) a court of a Territory;

(c) the Federal Magistrates Court.

2

the Federal Magistrates Court

(a) a court of a State;

(b) a court of a Territory.

3

a court of a State

(a) the Federal Court;

(b) the Federal Magistrates Court;

(c) a court of another State;

(d) a court of a Territory.

4

a court of the Australian Capital Territory

(a) the Federal Court;

(b) the Federal Magistrates Court;

(c) a court of a State;

(d) a court of another Territory.

5

a court of the Northern Territory

(a) the Federal Court;

(b) the Federal Magistrates Court;

(c) a court of a State;

(d) a court of another Territory.

190  Courts to act in aid of each other

                   All of the following must severally act in aid of, and be auxiliary to, each other in civil matters arising under this Act:

                     (a)  courts on which jurisdiction is conferred under this Division;

                     (b)  officers of, or under the control of, those courts.

Subdivision CTransfers between courts

191  Transfers—application of Subdivision

Scope of Subdivision

             (1)  This Subdivision applies if all the following conditions are satisfied:

                     (a)  proceedings in relation to a civil matter arising under this Act are pending, or have come, before a court (the transferring court) on which jurisdiction is conferred under this Division in relation to the matter;

                     (b)  jurisdiction is also conferred on another court (the receiving court) under this Division in relation to either of the following (the transfer matter):

                              (i)  the entire proceedings;

                             (ii)  an application in the proceedings;

                     (c)  the receiving court has the power to grant the remedies sought before the transferring court in relation to the transfer matter.

Transfers to which other legislation applies

             (2)  This Subdivision does not apply to a transfer between the Federal Court and the Federal Magistrates Court, except as provided by paragraph 192(2)(b).

Note 1:       Paragraph 192(2)(b) gives the Federal Magistrates Court the power to transfer a matter to the Federal Court with a recommendation that the Federal Court transfer the matter to another superior court.

Note 2:       Transfers from the Federal Court are covered by section 32AB of the Federal Court of Australia Act 1976 and transfers from the Federal Magistrates Court are covered by section 39 of the Federal Magistrates Act 1999.

192  Transfers—exercise of transfer power

General rule

             (1)  If section 193 (which deals with the criteria for transfers) is satisfied, the transferring court may transfer to the receiving court:

                     (a)  the transfer matter; and

                     (b)  if the transferring court considers it necessary or convenient—any related application (or all related applications) in the proceedings.

Cross‑jurisdictional transfers between lower courts and superior courts

             (2)  However, if the transferring court is a lower court, and the transferring court considers that section 193 is satisfied in relation to the transfer of a matter referred to in subsection (1) of this section to a receiving court that is a superior court other than the relevant superior court:

                     (a)  the transferring court does not have the power to transfer the matter to that receiving court; but

                     (b)  the transferring court may:

                              (i)  transfer the matter to the relevant superior court; and

                             (ii)  give the relevant superior court a recommendation that the matter be transferred to that receiving court by the relevant superior court.

193  Transfers—criteria for transfer

General

             (1)  The transferring court may make a transfer under section 192 only if it appears to the transferring court, taking into account the considerations covered by subsection (2) of this section, that:

                     (a)  the transfer matter arises out of, or is related to, other proceedings pending, or that have come, before the receiving court; or

                     (b)  it is otherwise in the interests of justice that the transfer matter be determined by the receiving court.

Relevant considerations

             (2)  The considerations covered by this subsection include the following:

                     (a)  the principal location, or place of business, of the parties in relation to the transfer matter;

                     (b)  where the event (or events) that are the subject of the transfer matter took place;

                     (c)  if the transfer matter involves secured real property—the jurisdiction in which the real property is located;

                     (d)  the desirability of related proceedings being heard in the same State or Territory;

                     (e)  any relevant recommendation received under subsection 192(2);

                      (f)  the suitability (taking into account the considerations referred to in paragraphs (a) to (e) and any other consideration) of having the transfer matter determined by the receiving court.

194  Transfers—how initiated

                   A court may make a transfer under section 192:

                     (a)  on the application of a party made at any stage; or

                     (b)  at the court’s own initiative.

195  Transfers—documents and procedure

                   If the transferring court transfers proceedings or an application to the receiving court under section 192:

                     (a)  the Registrar (or other proper officer) of the transferring court must give the Registrar (or other proper officer) of the receiving court all documents filed in the transferring court in relation to the proceedings or application; and

                     (b)  the receiving court must proceed as if:

                              (i)  the proceedings or application had been originally brought or made in the receiving court; and

                             (ii)  the same proceedings had been taken in the receiving court as were taken in the transferring court.

196  Transfers—conduct of proceedings

             (1)  Subject to any applicable rules of court, in dealing with the transfer matter transferred to the court under section 192, the receiving court must apply rules of evidence and procedure that:

                     (a)  are applied in any superior court; and

                     (b)  the court considers appropriate to be applied in the circumstances.

             (2)  If proceedings are transferred under section 192 from the transferring court to the receiving court, the receiving court must deal with the proceedings as if, subject to any order of the transferring court, the steps that had been taken for the purposes of the proceedings in the transferring court (including the making of an order), or similar steps, had been taken in the receiving court.

197  Transfers—entitlement to practise as a lawyer

             (1)  If proceedings (the transferred proceedings) in the transferring court are transferred to the receiving court under section 192, a person who is entitled to practise as a lawyer (however described) in the transferring court has the same entitlements to practise in relation to the matters covered by subsection (2) in the receiving court that the person would have if the receiving court were a federal court exercising federal jurisdiction.

             (2)  This subsection covers the following matters:

                     (a)  the transferred proceedings;

                     (b)  any other proceedings out of which the transferred proceedings arise or to which the transferred proceedings are related, if the other proceedings are to be determined together with the transferred proceedings.

198  Transfers—limitation on appeals

                   An appeal does not lie from a decision of a court:

                     (a)  in relation to the transfer of proceedings under section 192; or

                     (b)  as to which rules of evidence and procedure are to be applied under subsection 196(1).

Subdivision DOther matters

199  Plaintiffs may choose small claims procedure

Application for small claims procedure

             (1)  Proceedings are to be dealt with as small claims proceedings under this section if:

                     (a)  a person applies to a magistrates court, local court or the Federal Magistrates Court for an order covered by subsection (2); and

                     (b)  the person indicates, in the manner (if any) prescribed by the regulations or by the rules of the court, that the person wants the small claims procedure to apply to the proceedings.

Orders for which small claims procedure triggered

             (2)  The following table sets out when an order is covered by this subsection:

 

Orders for which small claims procedure triggered

Item

An order is covered by this subsection if it is made under ...

but only if (if applicable) ...

1

Section 178

the order is for an amount that is not more than:

(a) $40,000; or

(b) if a higher amount is prescribed by the regulations—that higher amount.

2

Section 37 of the National Credit Code

the value of the credit contract, mortgage, guarantee or consumer lease to which the order relates is not more than:

(a) $40,000; or

(b) if a higher amount is prescribed by the regulations—that higher amount.

3

Subsection 38(7) of the National Credit Code

the value of the credit contract, mortgage, guarantee or consumer lease to which the order relates is not more than:

(a) $40,000; or

(b) if a higher amount is prescribed by the regulations—that higher amount.

4

Section 74 of the National Credit Code

not applicable.

5

Section 75 of the National Credit Code

not applicable.

6

Section 76 of the National Credit Code

the value of the credit contract, mortgage, guarantee or consumer lease to which the order relates is not more than:

(a) $40,000; or

(b) if a higher amount is prescribed by the regulations—that higher amount.

7

Section 78 of the National Credit Code

the value of the credit contract, mortgage, guarantee or consumer lease to which the order relates is not more than:

(a) $40,000; or

(b) if a higher amount is prescribed by the regulations—that higher amount.

8

Section 96 of the National Credit Code

not applicable.

9

Section 101 of the National Credit Code

the value of the credit contract, mortgage, guarantee or consumer lease to which the order relates is not more than:

(a) $40,000; or

(b) if a higher amount is prescribed by the regulations—that higher amount.

10

Section 106 of the National Credit Code

the order is for an amount that is not more than:

(a) $40,000; or

(b) if a higher amount is prescribed by the regulations—that higher amount.

11

Subsection 107(3) of the National Credit Code

the order is for an amount that is not more than:

(a) $40,000; or

(b) if a higher amount is prescribed by the regulations—that higher amount.

12

Section 108 of the National Credit Code

the value of the credit contract, mortgage, guarantee or consumer lease to which the order relates is not more than:

(a) $40,000; or

(b) if a higher amount is prescribed by the regulations—that higher amount.

13

Section 118 of the National Credit Code

the order is for an amount that is not more than:

(a) $40,000; or

(b) if a higher amount is prescribed by the regulations—that higher amount.

             (3)  The value of a credit contract, mortgage, guarantee or consumer lease is:

                     (a)  worked out in accordance with the regulations; or

                     (b)  if there are no regulations in force for the purposes of paragraph (a):

                              (i)  for a credit contract—the amount of credit that has been, or may be, provided under the contract; and

                             (ii)  for a mortgage—the amount of credit that has been, or may be, provided under the credit contract to which the mortgage relates; and

                            (iii)  for a guarantee—the amount of credit that has been, or may be, provided under the credit contract to which the guarantee relates; and

                            (iv)  for a consumer lease—the amount payable under the consumer lease, as referred to in paragraph 170(1)(b) of the National Credit Code.

Court may make ancillary or consequential orders

             (4)  To avoid doubt, the court may make any ancillary or consequential orders it considers appropriate in relation to the orders made under the provisions referred to in subsection (2). The limits referred to in column 3 of the table do not apply to those ancillary or consequential orders.

Procedure

             (5)  In small claims proceedings, the court is not bound by any rules of evidence and procedure and may act:

                     (a)  in an informal manner; and

                     (b)  without regard to legal forms and technicalities.

             (6)  At any stage of the small claims proceedings, the court may amend the papers commencing the proceedings if sufficient notice is given to any party adversely affected by the amendment.

Legal representation

             (7)  A party to small claims proceedings may be represented in the proceedings by a lawyer only with the leave of the court.

             (8)  If the court grants leave for a party to the proceedings to be represented by a lawyer, the court may, if it considers appropriate, do so subject to conditions designed to ensure that no other party is unfairly disadvantaged.

             (9)  For the purposes of this section, a person is taken not to be represented by a lawyer if the lawyer is an employee or officer of the person.

200  Costs only if proceedings brought vexatiously etc.

             (1)  In proceedings that:

                     (a)  are dealt with as small claims proceedings (see section 199); or

                     (b)  relate to section 74 or 96 of the National Credit Code (which deal with hardship and postponement orders);

a party to the proceedings may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2).

             (2)  The party may be ordered to pay the costs only if:

                     (a)  the court is satisfied that the party brought the proceedings vexatiously or without reasonable cause; or

                     (b)  the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs.

201  Civil proceedings not to be stayed

                   No civil proceedings under this Act are to be stayed merely because the proceedings disclose, or arise out of, the commission of an offence.

202  Standard of proof in civil proceedings

                   If, in proceedings (other than proceedings for an offence), it is necessary to establish, or for the court to be satisfied, for any purpose relating to a matter arising under this Act, that:

                     (a)  a person has contravened a provision of this Act; or

                     (b)  default has been made in complying with a provision of this Act; or

                     (c)  an act or omission was unlawful because of a provision of this Act; or

                     (d)  a person has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to a contravention, or a default in complying with, a provision of this Act;

it is sufficient if the matter referred to in paragraph (a), (b), (c) or (d) is established, or the court is so satisfied on the balance of probabilities.


 

Division 3Criminal proceedings

Subdivision AApplication of this Division

203  Application of this Division

             (1)  This Division applies to the exclusion of sections 68, 70 and 70A of the Judiciary Act 1903.

             (2)  However, this Division does not limit the application of the provisions of the Judiciary Act 1903 (other than sections 68, 70 and 70A). In particular, it does not limit the application of subsection 39(2) of that Act in relation to criminal matters arising under this Act.

             (3)  Despite anything else in this Division, jurisdiction is conferred on the courts of a Territory only to the extent that the Constitution permits.

Subdivision BConferral of criminal jurisdiction

204  Criminal jurisdiction of courts

Cross‑vesting of criminal jurisdiction of courts

             (1)  Subject to this section, if a court of a State or Territory exercises jurisdiction in relation to a matter covered by subsection (2) in relation to offenders or persons (State offenders) charged with offences against the laws of the State or Territory, the court has the equivalent jurisdiction in relation to offenders or persons charged with offences against this Act.

             (2)  The matters covered by this subsection are as follows:

                     (a)  the summary conviction of State offenders;

                     (b)  their examination and commitment for trial on indictment;

                     (c)  their trial and conviction on indictment;

                     (d)  their sentencing, punishment and release;

                     (e)  the liability to make reparation in connection with their offences;

                      (f)  the forfeiture of property in connection with their offences;

                     (g)  the proceeds of their crimes;

                     (h)  the hearing and determination of:

                              (i)  proceedings connected with; or

                             (ii)  appeals arising out of; or

                            (iii)  appeals arising out of proceedings connected with;

                            any trial or conviction referred to in paragraph (a), (b) or (c), or any matter of a kind referred to in paragraph (d), (e), (f) or (g).

Certain aspects of jurisdiction to be exercised only by magistrate

             (3)  Only a magistrate may exercise the jurisdiction conferred by subsection (1) in relation to the summary conviction, or examination and commitment for trial, of any person.

Person who pleads guilty to an indictable offence may be sentenced or otherwise dealt with without trial

             (4)  The jurisdiction conferred by subsection (1) includes jurisdiction in accordance with provisions of a relevant criminal law of a State or Territory, and:

                     (a)  the reference in paragraph (2)(h) to “any trial or conviction” includes a reference to any conviction or sentencing in accordance with the provisions of a relevant criminal law; and

                     (b)  unless the contrary intention appears, a reference to jurisdiction conferred by subsection (1) includes a reference to such included jurisdiction.

             (5)  Relevant criminal law means a law providing that if, in proceedings before a court, a person pleads guilty to a charge for which the person could be prosecuted on indictment, the person may be committed, to a court having jurisdiction to try offences on indictment, to be sentenced or otherwise dealt with without being tried in that last‑mentioned court.

             (6)  A person may be dealt with in accordance with a relevant criminal law even if, apart from this section, the offence concerned:

                     (a)  would be required to be prosecuted on indictment; or

                     (b)  would be required to be prosecuted either summarily or on indictment.

             (7)  For the purposes of the application of a relevant criminal law as provided by subsection (4):

                     (a)  a reference in that law to an indictable offence is taken to include a reference to an offence that may be prosecuted on indictment; and

                     (b)  in order to determine the sentence that may be imposed on a person by a court pursuant to the relevant criminal law, the person is taken to have been prosecuted and convicted on indictment in that court.

Jurisdiction in relation to summary offences is unlimited

             (8)  Subject to subsection (10), the jurisdiction conferred on a court of a State or Territory by subsection (1) is conferred despite any limits as to locality of the jurisdiction of that court under the law of that State or Territory.

Court may decline to exercise jurisdiction in relation to summary offences

             (9)  If:

                     (a)  jurisdiction is conferred on a court of a State or Territory in relation to the summary conviction of persons charged with offences against this Act by subsection (1); and

                     (b)  the court is satisfied that it is appropriate to do so, having regard to all the circumstances (including the public interest);

the court may decline to exercise that jurisdiction in relation to an offence committed in another State or Territory.

Limits on jurisdiction in relation to indictable offences

           (10)  The jurisdiction conferred on a court of a State or Territory by subsection (1) in relation to:

                     (a)  the examination and commitment for trial on indictment; and

                     (b)  the trial and conviction on indictment;

of offenders or persons charged with offences against this Act is conferred only in relation to:

                     (c)  offences committed outside Australia (not including the coastal sea); and

                     (d)  offences committed, begun or completed in the State or the Territory concerned.

205  Criminal proceedings—laws to be applied

Laws to be applied

             (1)  Subject to this Division, the laws of a State or Territory in relation to:

                     (a)  the arrest and custody in the State or Territory of offenders or persons charged with offences; and

                     (b)  criminal procedure in the State or Territory in relation to such persons; and

                     (c)  the rules of evidence applied in criminal procedure in the State or Territory in relation to such persons;

apply in the State or Territory, so far as they are applicable, to persons who are charged with offences against this Act.

Meaning of criminal procedure

             (2)  Criminal procedure means the procedure for:

                     (a)  the summary conviction; and

                     (b)  the examination and commitment for trial on indictment; and

                     (c)  the trial and conviction on indictment; and

                     (d)  the hearing and determination of appeals arising out of any such trial or conviction or out of any related proceedings;

of offenders or persons charged with offences, and includes the procedure for holding accused persons to bail.

206  Criminal proceedings—how taken

             (1)  In any proceedings for an offence against this Act, any information, charge, complaint or application may be laid or made by:

                     (a)  ASIC; or

                     (b)  a delegate of ASIC; or

                     (c)  another person authorised in writing by the Minister to bring the proceedings.

             (2)  A delegation for the purposes of paragraph (1)(b), or an authorisation for the purposes of paragraph (1)(c), may relate to all offences, or to specified offences, against this Act.

             (3)  Nothing in this section affects the operation of the Director of Public Prosecutions Act 1983.

207  Certain persons to assist in prosecutions

             (1)  If a prosecution in relation to an offence against this Act has been brought, or ASIC is of the opinion that a prosecution in relation to an offence against this Act ought to be brought, against a person (the defendant), ASIC may:

                     (a)  if the defendant is a natural person—require any person who is or was a partner, employee or agent of the defendant; or

                     (b)  if the defendant is a body corporate—require any person who is or was an officer (within the meaning of the Corporations Act 2001), employee or agent of the defendant;

to assist in the prosecution, and the person who is so required must give all assistance in connection with the prosecution that that person is reasonably able to give.

             (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.

Penalty:  5 penalty units.

             (3)  Subsection (2) is an offence of strict liability.

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

             (4)  For the purposes of subsection (2), it is a defence if the person:

                     (a)  is the defendant; or

                     (b)  is or has been the defendant’s lawyer.

Note:          A defendant bears an evidential burden in relation to the matter in subsection (4) (see subsection 13.3(3) of the Criminal Code).

             (5)  If a person (other than the defendant or a person who is, or has been, the defendant’s lawyer) does not comply with a requirement under subsection (1), the court may, on the application of ASIC, order the person to comply with the requirement within such time, and in such manner, as the court orders.

             (6)  If ASIC makes a requirement under subsection (1) in writing, the requirement is not a legislative instrument.

208  Privilege against self‑incrimination not available to bodies corporate in criminal proceedings

             (1)  In proceedings in a court when exercising jurisdiction in relation to a criminal matter arising under this Act, a body corporate is not entitled to refuse or fail to comply with a requirement:

                     (a)  to answer a question or give information; or

                     (b)  to produce a book or any other thing; or

                     (c)  to do any other act whatever;

on the ground that the answer or information, production of the book or other thing, or doing that other act might tend:

                     (d)  to incriminate the body (whether in relation to an offence to which the proceedings relate or otherwise); or

                     (e)  to make the body liable to a penalty (whether in relation to anything to which the proceedings relate or otherwise).

             (2)  Subsection (1) applies whether or not the body concerned is a defendant in the proceedings or in any other proceedings.


 

Division 4Proceedings generally

209  ASIC’s power to intervene in proceedings

             (1)  ASIC may intervene in any proceedings relating to a matter arising under this Act.

             (2)  If ASIC intervenes in proceedings referred to in subsection (1), ASIC is taken to be a party to the proceedings and, subject to this Act, has all the rights, duties and liabilities of such a party.

             (3)  Without limiting subsection (2), ASIC may appear and be represented in any proceedings in which it wishes to intervene pursuant to subsection (1):

                     (a)  by an ASIC staff member; or

                     (b)  by a natural person to whom, or by an officer or employee of a person or body to whom or to which, ASIC has delegated its functions and powers under this Act or such of those functions and powers as relate to a matter to which the proceedings relate; or

                     (c)  by a lawyer.

210  Evidence of contravention

                   For the purposes of this Act, a certificate that:

                     (a)  purports to be signed by the Registrar or other proper officer of an Australian court; and

                     (b)  states:

                              (i)  that a person was convicted by that court on a specified day of a specified offence; or

                             (ii)  that a person charged before that court with a specified offence was, on a specified day, found in that court to have committed the offence but that the court did not proceed to convict the person of the offence;

is, unless it is proved that the conviction was quashed or set aside, or that the finding was set aside or reversed, as the case may be, conclusive evidence:

                     (c)  if subparagraph (b)(i) applies—that the person was convicted of the offence on that day; and

                     (d)  if the offence was constituted by a contravention of a provision of a law—that the person contravened that provision.

211  Power of court to punish for contempt of court

                   Nothing in a provision of this Act that provides:

                     (a)  that a person must not contravene an order of the court; or

                     (b)  that a person who contravenes an order of the court contravenes a provision of this Act or commits an offence;

affects the powers of the court in relation to the punishment of contempts of the court.


 

Chapter 5Administration

Part 5‑1Registers relating to credit activities

Division 1Introduction

212  Guide to this Part

This Part is about registers relating to credit activities that must be established and maintained by ASIC.

Division 2 requires ASIC to establish and maintain one or more registers relating to credit activities. It also deals with how those registers are to be maintained, and the inspection and public availability of those registers.


 

Division 2Registers relating to credit activities

213  Credit registers

ASIC must establish and maintain credit registers

             (1)  ASIC must establish and maintain one or more registers (the credit registers) relating to credit activities.

How credit registers are to be maintained

             (2)  The regulations may prescribe the way in which the credit registers must be established or maintained, including the details that ASIC must enter in the credit registers in relation to the following persons:

                     (a)  licensees;

                     (b)  persons registered to engage in credit activities under the Transitional Act;

                     (c)  credit representatives of licensees or persons registered to engage in credit activities under the Transitional Act;

                     (d)  persons against whom a banning order or disqualification order is made under Part 2‑4;

                     (e)  persons who are banned from engaging in a credit activity under a law of a State or Territory;

                      (f)  any other persons prescribed by the regulations.

             (3)  Without limiting subsection (2), the credit registers:

                     (a)  may be maintained in an electronic form; and

                     (b)  may be maintained as part of, or together with, any register in relation to financial services maintained under section 922A of the Corporations Act 2001.

Credit register is not a legislative instrument

             (4)  A credit register established under this section is not a legislative instrument.

214  Inspection and public availability of credit registers

             (1)  A person may inspect the credit registers and may make copies of, or take extracts from, them.

             (2)  ASIC may make the credit registers, or any part of them, available to the public on its website or by other means.

             (3)  Any disclosure necessary for the purposes of this section is authorised by this section.


 

Part 5‑2Documents lodged with ASIC or required by this Act

Division 1Introduction

215  Guide to this Part

This Part deals with the lodging of documents with ASIC. It also has offences relating to making false statements in documents.

Division 2 deals with how documents are lodged with ASIC and the approved forms in which the documents must be lodged. It also deals with ASIC’s power to refuse to receive documents (in which case, the documents will not be treated as having been lodged with ASIC).

Division 3 deals with ASIC’s register of documents that have been lodged with ASIC.

Division 4 has other provisions relating to documents (such as offences for making false statements in documents lodged with ASIC or required for the purposes of this Act).


 

Division 2Lodgment of documents with ASIC

216  When documents are lodged with ASIC

             (1)  A document is lodged with ASIC under this Act if the document:

                     (a)  is transmitted to ASIC in an electronic format approved by ASIC; or

                     (b)  if ASIC approves another manner for the lodgment of a document with ASIC—is given to ASIC in that manner.

             (2)  However, a document is not lodged with ASIC under this Act if ASIC refuses to receive the document under subsection 218(1).

Note:          Subsection 232(3) provides for when a compliance certificate under section 53 is taken not to be lodged with ASIC.

             (3)  If a document is lodged with ASIC, then any other material that is lodged with the document as required by this Act or an approved form is taken to be included in that document.

Note:          For example, this subsection means that a person will contravene section 225 if the person makes a false or misleading statement in the other material.

217  Approved forms for documents to be lodged with ASIC

             (1)  A document that this Act requires to be lodged with ASIC in an approved form must, if ASIC has approved a form for the document:

                     (a)  be in the approved form; and

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

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

             (2)  If:

                     (a)  this Act requires a document to be lodged with ASIC in an approved form; and

                     (b)  a provision of this Act either specifies, or provides for regulations to prescribe, information, statements, explanations or other matters that must be included in the document, or other material that must accompany the document;

that other provision is not taken to exclude or limit the operation of subsection (1) in relation to the approved form (and so the approved form may also require information etc. to be included in the form or material to accompany the form).

218  ASIC may refuse to receive document etc.

ASIC may refuse to receive document etc.

             (1)  If ASIC considers that a document submitted to ASIC for lodgment under this Act:

                     (a)  contains matter contrary to law; or

                     (b)  contains matter that, in a material particular, is false or misleading in the form or context in which it is included; or

                     (c)  is incomplete; or

                     (d)  contravenes this Act; or

                     (e)  contains an error, alteration or erasure;

ASIC may refuse to receive the document and may make a request under subsection (2).

Note:          The effect of ASIC refusing to receive the document is that the document is not lodged with ASIC (see subsection 216(2)).

             (2)  For the purposes of subsection (1), ASIC may request:

                     (a)  that the document be appropriately amended or completed and resubmitted; or

                     (b)  that a fresh document be submitted in its place; or

                     (c)  if the document is incomplete—that a supplementary document in the approved form be lodged.

Notice to provide further document or information

             (3)  ASIC may give a written notice to a person who submits a document (the first document) for lodgment under this Act, requiring the person to:

                     (a)  give to ASIC any other document; or

                     (b)  give to ASIC any information;

that ASIC considers necessary in order to form an opinion as to whether it may refuse to receive the first document.

Notice must specify day by which person must comply

             (4)  The notice must specify the day by which the person 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 person.

Requirement to comply with notice

             (5)  The person must comply with the notice within the time specified in the notice.

Civil penalty:          2,000 penalty units.

Strict liability offence

             (6)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (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.

             (7)  Subsection (6) is an offence of strict liability.

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


 

Division 3ASIC’s register of documents

219  Register of documents lodged with ASIC

ASIC may maintain document registers

             (1)  ASIC may establish and maintain one or more registers (the document registers) of documents that have been lodged with ASIC under this Act.

How document registers to be maintained

             (2)  ASIC may establish and maintain the document registers in any form it considers appropriate.

             (3)  Without limiting subsection (2), the document registers may be maintained in an electronic form.

No entitlement to inspect document registers

             (4)  ASIC is not required to:

                     (a)  permit persons to inspect the document registers, or make copies of, or take extracts from, the document registers; or

                     (b)  make any part of the document registers available to the public.

Document register is not a legislative instrument

             (5)  A document register established under this section is not a legislative instrument.

220  ASIC may require person to give information for document registers

Notice to person to give information

             (1)  If information about a person is included on the document registers, ASIC may, at any time, give the person a written notice requiring the person to give to ASIC specified information about the person, being information of the kind included on the document registers.

Notice must specify day by which person must comply

             (2)  The notice must specify the day by which the person 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 person.

Requirement to comply with notice

             (3)  The person must comply with the notice within the time specified in the notice.

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 (3); 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.

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

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

221  Written document setting out information from document registers is prima facie evidence of matters

             (1)  ASIC may, by using a mechanical, electronic or other device for processing data, prepare a written document that sets out information obtained by ASIC from the document registers.

             (2)  In proceedings in a court, a written document that purports to be a document prepared by ASIC under subsection (1) is admissible as prima facie evidence of the matters in the document.

             (3)  A written document need not be certified by ASIC, or signed, in order to be taken to purport to have been prepared by ASIC.


 

Division 4Other provisions relating to documents lodged with ASIC or required under this Act

222  Certified copy or extract of document lodged with ASIC is admissible in evidence

             (1)  In proceedings in a court, a copy of, or extract from, any document lodged with ASIC under this Act, and certified by ASIC, is admissible in evidence as of equal validity with the original document.

             (2)  The reference in subsection (1) to a document includes, if a copy of that document has been included in the document register by ASIC, a reference to that copy.

223  ASIC may destroy or dispose of certain documents

                   ASIC may destroy or otherwise dispose of any document that is lodged with ASIC under this Act if:

                     (a)  ASIC considers that it is no longer necessary or desirable to retain it; and

                     (b)  either of the following apply:

                              (i)  it has been in ASIC’s possession for the period prescribed by the regulations;

                             (ii)  a copy of the document has been included in the document register.

224  Court may order lodgment of document etc.

             (1)  If a person has failed to comply with:

                     (a)  any provision of this Act that requires the lodgment of any document with ASIC; or

                     (b)  any request of ASIC under subsection 218(2) (which deals with requests to resubmit documents etc.);

ASIC may give the person a written notice requiring the person to comply with the requirement or request within 14 days.

             (2)  If the person does not comply with the notice within 14 days, the court may, on an application by ASIC, make an order directing the person to comply with the requirement or request.

             (3)  The order may provide that all costs of and incidental to the application are to be borne by one or more of the following:

                     (a)  the person;

                     (b)  if the person is a body corporate—a director, secretary or senior manager of the body corporate who is responsible for the failure to comply;

                     (c)  if the person is a partnership or the trustees of a trust—a partner or trustee who is responsible for the failure to comply.

225  Offences relating to documents lodged with ASIC etc.

Documents this section applies to

             (1)  This section applies to the following documents:

                     (a)  any document required under or for the purposes of this Act;

                     (b)  any document lodged with or submitted to ASIC under or for the purposes of this Act.

Requirement where person knows matter is false or misleading

             (2)  A person must not:

                     (a)  make, or authorise the making of, a statement in the document if the person knows, or is reckless as to whether, the statement:

                              (i)  is false in a material particular or materially misleading; or

                             (ii)  has omitted from it a matter or thing the omission of which renders the document materially misleading; or

                            (iii)  is based on information that is false in a material particular or materially misleading, or has omitted from it a matter or thing the omission of which renders the document materially misleading; or

                     (b)  omit, or authorise the omission of, a matter from the document if the person knows, or is reckless as to whether, without the matter, the document is false in a material particular or materially misleading.

Civil penalty:          2,000 penalty units.

Offences

             (3)  A person commits an offence if:

                     (a)  the person makes, or authorises the making of, a statement in the document; and

                     (b)  the person knows that the statement:

                              (i)  is false in a material particular or materially misleading; or

                             (ii)  has omitted from it a matter or thing the omission of which renders the document materially misleading; or

                            (iii)  is based on information that is false in a material particular or materially misleading, or has omitted from it a matter or thing the omission of which renders the document materially misleading.

Criminal penalty:    200 penalty units, or imprisonment for 5 years, or both.

             (4)  A person commits an offence if:

                     (a)  the person omits, or authorises the omission of, a matter from the document; and

                     (b)  the person knows that, without the matter, the document is false in a material particular or materially misleading.

Criminal penalty:    200 penalty units, or imprisonment for 5 years, or both.

Requirement to take reasonable steps

             (5)  A person must take reasonable steps to ensure that the person does not:

                     (a)  make, or authorise the making of, a statement in the document that:

                              (i)  is false in a material particular or materially misleading; or

                             (ii)  has omitted from it a matter or thing the omission of which renders the document materially misleading; or

                            (iii)  is based on information that is false in a material particular or materially misleading, or has omitted from it a matter or thing the omission of which renders the document materially misleading; or

                     (b)  omit, or authorise the omission of, a matter from the document, without which the document is false in a material particular or materially misleading.

Civil penalty:          2,000 penalty units.

Offence

             (6)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (5); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    5 penalty units.

             (7)  Subsection (6) is an offence of strict liability.

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

Approval of document taken to be authorisation

             (8)  For the purposes of this section, if a person votes in favour of a resolution approving, or otherwise approves, the document, the person is taken to have authorised:

                     (a)  the making of any statement in the document; and

                     (b)  the omission of any matter from the document.


 

Part 5‑3Concealment or falsification of credit books

Division 1Introduction

226  Guide to this Part

This Part deals with the concealment or falsification of credit books.

Division 2 includes requirements not to conceal or falsify credit books, and a requirement to take precautions against the falsification of credit books.


 

Division 2Prohibitions relating to the concealment or falsification of credit books

227  Concealing etc. of credit books

Prohibition on concealing credit books etc.

             (1)  A person must not:

                     (a)  conceal, destroy, mutilate or alter a credit book; or

                     (b)  send a credit book out of this jurisdiction.

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 6 months imprisonment, or both.

Defence

             (3)  For the purposes of subsections (1) and (2), it is a defence if the person did not act with intent to:

                     (a)  defraud; or

                     (b)  prevent, delay or obstruct the carrying out of an examination, investigation or audit, or the exercise of a power, under this Act.

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).

Meaning of credit book

             (4)  Credit book means:

                     (a)  a book (by whatever name it is known) that this Act requires to be kept; or

                     (b)  a document that is:

                              (i)  prepared; or

                             (ii)  lodged with or submitted to ASIC; or

                            (iii)  given to a person;

                            under, or for the purposes of, this Act; or

                     (c)  a book relating to the credit activities engaged in by a licensee or a credit representative; or

                     (d)  a financial record.

228  Falsification of credit books

Requirements in relation to falsification of credit books

             (1)  A person must not engage in conduct that results in the falsification of a credit book.

Civil penalty:          2,000 penalty units.

Offence

             (2)  A person commits an offence if:

                     (a)  the person engages in conduct; and

                     (b)  the conduct results in the falsification of a credit book.

Criminal penalty:    50 penalty units, or 6 months imprisonment, or both.

Defence

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

                     (a)  the person acted honestly; and

                     (b)  in all the circumstances, the act or omission constituting the offence should be excused.

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).

229  Precautions against falsification of credit books

Requirement to take precautions against falsification

             (1)  A person who is required by this Act to keep a credit book must take reasonable steps to:

                     (a)  guard against the falsification of the credit book; and

                     (b)  facilitate the discovery of any falsification of the credit book.

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 6 months imprisonment, or both.


 

Part 5‑4Fees imposed by the National Consumer Credit Protection (Fees) Act 2009

Division 1Introduction

230  Guide to this Part

This Part deals with fees imposed by the National Consumer Credit Protection (Fees) Act 2009.

Division 2 includes provisions relating to fees, including the payment of fees, the lodgment of documents or doing of acts without the payment of fees, and the waiver or refund of fees.


 

Division 2Fees imposed by the National Consumer Credit Protection (Fees) Act 2009

231  Fees are payable to the Commonwealth

                   The fees imposed under the National Consumer Credit Protection (Fees) Act 2009 in relation to this Act are payable to the Commonwealth.

232  Lodgment of document without payment of fee

             (1)  This section applies where:

                     (a)  a fee is payable under section 231 for the lodgment of a document under this Act; and

                     (b)  the document was submitted for lodgment without payment of the fee.

             (2)  The document is not taken not to have been lodged merely because of non‑payment of the fee.

             (3)  Despite subsection (2), a compliance certificate that is required to be lodged under section 53 is taken not to have been lodged until the fee is paid.

233  Doing act without payment of fee

                   If a fee is payable under section 231 for a matter involving the doing of an act by the Minister or ASIC under this Act, the Minister or ASIC may refuse to do that act until the fee is paid.

234  Effect of sections 232 and 233

                   Sections 232 and 233 have effect despite anything in another Part of this Act.

235  Waiver and refund of fees

                   Nothing in this Division or the National Consumer Credit Protection (Fees) Act 2009 prevents the Commonwealth from:

                     (a)  waiving or reducing, in a particular case or in particular classes of cases, fees that would otherwise be payable under this Act; or

                     (b)  refunding, in whole or in part, in a particular case or in particular classes of cases, fees paid under this Act.

236  Debts due to the Commonwealth

                   ASIC may, on behalf of the Commonwealth, recover a debt due under this Division.

237  Payment of fee does not give right to inspect or search

                   To avoid doubt, nothing in this Division, and nothing done under this Division:

                     (a)  imposes on ASIC a duty to allow the inspection or search of a register or document, or to make available information; or

                     (b)  confers a right to inspect or search a register or document or to have information made available;

under this Act except so far as such a duty or right would, but for the effect of section 233, exist under a provision of another Part of this Act or under some other law.


 

Part 5‑5Other administrative matters

Division 1Introduction

238  Guide to this Part

This Part includes miscellaneous provisions relating to administrative matters.


 

Division 2Other administrative matters

239  ASIC has general administration of this Act

                   Subject to the ASIC Act, ASIC has the general administration of this Act.

240  Obstructing or hindering ASIC etc.

             (1)  A person must not engage in conduct that results in the obstruction or hindering of ASIC, or any other person, in the performance of a function or the exercise of a power under this Act.

Civil penalty:          2,000 penalty units.

             (2)  A person commits an offence if:

                     (a)  the person engages in conduct; and

                     (b)  the conduct results in the obstruction or hindering of ASIC, or any other person, in the performance of a function or the exercise of a power under this Act.

Criminal penalty:    100 penalty units, or imprisonment for 2 years, or both.

             (3)  For the purposes of subsections (1) and (2), it is a defence if the person has a reasonable excuse.

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).

241  Approved codes of conduct

             (1)  ASIC may, on application, approve codes of conduct that relate to any aspect of the activities of:

                     (a)  licensees; or

                     (b)  credit representatives;

being activities in relation to which ASIC has a regulatory responsibility. The approval must be in writing.

             (2)  ASIC may, on application, approve a variation of an approved code of conduct. The approval must be in writing.

             (3)  ASIC must not approve a code of conduct, or a variation of a code of conduct, unless it is satisfied that:

                     (a)  the code of conduct, or the code of conduct as proposed to be varied, is not inconsistent with this Act or any other law of the Commonwealth under which ASIC has regulatory responsibilities; and

                     (b)  it is appropriate to approve the code of conduct or variation, having regard to the following matters:

                              (i)  the ability of the applicant to ensure that persons who hold out that they comply with the code of conduct will comply with the code of conduct as in force from time to time;

                             (ii)  the desirability of codes of conduct being harmonised to the greatest extent possible;

                            (iii)  any other matter ASIC considers relevant.

             (4)  ASIC may revoke an approval of a code of conduct:

                     (a)  on application by the person who applied for the approval; or

                     (b)  if ASIC is no longer satisfied as referred to in subsection (3).

The revocation must be in writing.

             (5)  The following are legislative instruments:

                     (a)  an approval of a code of conduct under subsection (1);

                     (b)  an approval of a variation of a code of conduct under subsection (2);

                     (c)  a revocation of a code of conduct under subsection (4).

242  ASIC may arrange for use of computer programs to make decisions

             (1)  ASIC may arrange for the use, under ASIC’s control, of computer programs for any purposes for which ASIC may make decisions under this Act.

             (2)  A decision made by the operation of a computer program under an arrangement made under subsection (1) is taken to be a decision made by ASIC.

243  Qualified privilege for information given to ASIC

             (1)  A person has qualified privilege in relation to the giving of any information to ASIC:

                     (a)  that the person is required or expressly permitted to give under this Act; or

                     (b)  that relates to a contravention, or possible contravention, of the credit legislation; or

                     (c)  that relates to a matter that is relevant to a decision of ASIC under:

                              (i)  section 37 (which deals with when ASIC must grant a licence); or

                             (ii)  section 54 or 55 (which deal with ASIC’s powers to suspend or cancel licences); or

                            (iii)  subsection 80(1) (which deals with ASIC’s power to make banning orders).

             (2)  A person who has qualified privilege under subsection (1) in relation to conduct is also not liable for any action based on breach of confidence in relation to that conduct.

             (3)  The protections given by this section to a person in relation to conduct extend to representatives of the person.

244  ASIC certificate is prima facie evidence of matters

             (1)  ASIC may issue a certificate stating that a requirement of this Act specified in the certificate:

                     (a)  had or had not been complied with at a date or within a period specified in the certificate; or

                     (b)  had been complied with at a date specified in the certificate but not before that date.

             (2)  In proceedings in a court, a certificate issued by ASIC under subsection (1) is admissible as prima facie evidence of the matters stated in the certificate.

245  Operator of approved external dispute resolution scheme may give information to ASIC

                   The operator of an approved external dispute resolution scheme may give information to ASIC about:

                     (a)  a person becoming a member of the scheme; or

                     (b)  a person ceasing to be a member of the scheme.


 

Chapter 6Compliance and enforcement

Part 6‑1Investigations

Division 1Introduction

246  Guide to this Part

This Part is about investigations made by ASIC.

Division 2 includes powers of ASIC to make investigations. ASIC may make investigations in certain circumstances for the due administration of the Commonwealth credit legislation. The Minister may also direct ASIC to investigate matters in certain circumstances.

Division 2 also deals with reports about investigations.


 

Division 2Investigations

247  General powers of investigation

             (1)  ASIC may make such investigation as it considers expedient for the due administration of the Commonwealth credit legislation if it has reason to suspect that there may have been committed:

                     (a)  a contravention of the credit legislation; or

                     (b)  a contravention of a law of the Commonwealth, or of a law of a referring State or a Territory, being a contravention that:

                              (i)  concerns the management, conduct or affairs of a licensee, credit representative or other person who engages, or has engaged, in a credit activity; or

                             (ii)  involves fraud or dishonesty and relates to a credit activity engaged in by a person, or a credit contract, mortgage, guarantee or consumer lease.

248  Minister may direct investigations

             (1)  If, in the Minister’s opinion, it is in the public interest in relation to this jurisdiction for a particular matter to which subsection (2) applies to be investigated, he or she may by writing direct ASIC to investigate that matter.

             (2)  This subsection applies to a matter relating to any of the following:

                     (a)  an alleged or suspected contravention of the Commonwealth credit legislation;

                     (b)  an alleged or suspected contravention of a law of the Commonwealth, or a law of a referring State or a Territory, being a contravention that:

                              (i)  concerns the management, conduct or affairs of a licensee, credit representative or other person who engages, or has engaged, in a credit activity; or

                             (ii)  involves fraud or dishonesty and relates to a credit activity engaged in by a person, or a credit contract, mortgage, guarantee or consumer lease;

                     (c)  a credit activity engaged in by a person.

             (3)  ASIC must comply with a direction under subsection (1).

             (4)  A direction under subsection (1) does not prevent ASIC from delegating a function or power.

             (5)  A direction under subsection (1) is not a legislative instrument.

249  Interim report on investigation

             (1)  If, in the course of an investigation under this Part, ASIC forms the opinion that:

                     (a)  a serious contravention of a law of the Commonwealth, or a law of a referring State or a Territory, has been committed; or

                     (b)  to prepare an interim report about the investigation would enable or assist the protection, preservation or prompt recovery of property; or

                     (c)  there is an urgent need for the Commonwealth credit legislation to be amended;

it must prepare an interim report that relates to the investigation and sets out:

                     (d)  if paragraph (a) applies—its findings about the contravention, and the evidence and other material on which those findings are based; or

                     (e)  if paragraph (b) applies—such matters as, in its opinion, will so enable or assist; or

                      (f)  if paragraph (c) applies—its opinion about amendment of that legislation, and its reasons for that opinion;

and such other matters relating to, or arising out of, the investigation as it considers appropriate.

             (2)  ASIC may prepare an interim report about an investigation under this Part and must do so if the Minister so directs.

             (3)  A report under subsection (2) must set out such matters relating to, or arising out of, the investigation as ASIC considers appropriate or the Minister directs.

             (4)  An interim report prepared under this section is not a legislative instrument.

250  Final report on investigation

             (1)  At the end of an investigation under section 247, ASIC may prepare a report about the investigation and must do so if the Minister so directs.

             (2)  At the end of an investigation under section 248, ASIC must prepare a report about the investigation.

             (3)  A report under this section must set out:

                     (a)  ASIC’s findings about the matters investigated; and

                     (b)  the evidence and other material on which those findings are based; and

                     (c)  such other matters relating to, or arising out of, the investigation as ASIC considers appropriate or the Minister directs.

             (4)  A direction under subsection (1) is not a legislative instrument.

             (5)  A report prepared under this section is not a legislative instrument.

251  Distribution of report

             (1)  As soon as practicable after preparing a report under this Part, ASIC must give a copy of the report to the Minister.

             (2)  If a report, or part of a report, under this Part relates to a serious contravention of a law of the Commonwealth, or a law of a referring State or a Territory, ASIC may give a copy of the whole or a part of the report to:

                     (a)  the Australian Federal Police; or

                     (b)  the Chief Executive Officer of the Australian Crime Commission or a member of the staff of the ACC (within the meaning of the Australian Crime Commission Act 2002); or

                     (c)  the Director of Public Prosecutions; or

                     (d)  an agency, authority, body or person prescribed by the regulations.

             (3)  If a report, or part of a report, under this Part relates to a person’s affairs to a material extent, ASIC may, at the person’s request or of its own motion, give to the person a copy of the report or of part of the report.

             (4)  The Minister may cause the whole or a part of a report under this Part to be printed and published.


 

Part 6‑2Examination of persons

Division 1Introduction

252  Guide to this Part

This Part is about the examination of persons by ASIC.

Division 2 allows ASIC to examine a person if ASIC suspects or believes, on reasonable grounds, that the person can give information relevant to an investigation under Part 6‑1.

Division 2 also includes rules relating to the procedure for examination of persons by ASIC.


 

Division 2Examination of persons

253  Notice requiring appearance for examination

             (1)  This section applies if ASIC, on reasonable grounds, suspects or believes that a person can give information relevant to a matter that it is investigating, or is to investigate, under Part 6‑1.

             (2)  ASIC may, by written notice given to the person in the form prescribed by the regulations, require the person:

                     (a)  to give to ASIC all reasonable assistance in connection with the investigation; and

                     (b)  to appear before a specified ASIC member or ASIC staff member for examination on oath and to answer questions.

Note:          Failure to comply with a requirement made under this subsection is an offence (see section 290).

             (3)  A notice given under subsection (2) must:

                     (a)  state the general nature of the matter referred to in subsection (1); and

                     (b)  set out the effect of subsection 257(1) and section 295.

254  Proceedings at examination

                   The remaining provisions of this Part apply if, pursuant to a requirement made under section 253 for the purposes of an investigation under Part 6‑1, a person (the examinee) appears before another person (the inspector) for examination.

255  Requirements made of examinee

             (1)  The inspector may examine the examinee on oath or affirmation and may, for that purpose:

                     (a)  require the examinee to either take an oath or make an affirmation; and

                     (b)  administer an oath or affirmation to the examinee.

Note:          Failure to comply with a requirement made under this subsection is an offence (see section 290).

             (2)  An offence under subsection 290(2) relating to subsection (1) of this section is an offence of strict liability.

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

             (3)  The oath or affirmation to be taken or made by the examinee for the purposes of the examination is an oath or affirmation that the statements that the examinee will make will be true.

             (4)  The inspector may require the examinee to answer a question that is put to the examinee at the examination and is relevant to a matter that ASIC is investigating, or is to investigate, under Part 6‑1.

Note:          Failure to comply with a requirement made under this subsection is an offence (see section 290).

256  Examination to take place in private

             (1)  The examination must take place in private and the inspector may give directions about who may be present during it, or during a part of it.

             (2)  A person must not be present at the examination unless he or she:

                     (a)  is the inspector, the examinee or an ASIC member; or

                     (b)  is an ASIC staff member approved by ASIC; or

                     (c)  is entitled to be present by virtue of:

                              (i)  a direction under subsection (1); or

                             (ii)  subsection 257(1).

Criminal penalty:    10 penalty units, or 3 months imprisonment, or both.

             (3)  Subsection (2) is an offence of strict liability.

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

257  Examinee’s lawyer may attend

             (1)  The examinee’s lawyer may be present at the examination and may, at such times during it as the inspector determines:

                     (a)  address the inspector; and

                     (b)  examine the examinee;

about matters about which the inspector has examined the examinee.

             (2)  If, in the inspector’s opinion, a person is trying to obstruct the examination by exercising rights under subsection (1), the inspector may require the person to stop addressing the inspector, or examining the examinee, as the case requires.

Note:          Failure to comply with a requirement made under this subsection is an offence (see section 290).

             (3)  An offence under subsection 290(3) relating to subsection (2) of this section is an offence of strict liability.

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

258  Record of examination

             (1)  The inspector may, and must if the examinee so requests, cause a record to be made of statements made at the examination.

             (2)  If a record made under subsection (1) is in writing or is reduced to writing:

                     (a)  the inspector may require the examinee to read it, or to have it read to him or her, and may require him or her to sign it; and

                     (b)  the inspector must, if requested in writing by the examinee to give to the examinee a copy of the written record, comply with the request without charge but subject to such conditions (if any) as the inspector imposes.

Note:          Failure to comply with a requirement made under this subsection is an offence (see section 290).

             (3)  An offence under subsection 290(2) relating to paragraph (2)(a) of this section is an offence of strict liability.

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

259  Giving to other persons copies of record

             (1)  ASIC may give a copy of a written record of the examination, or such a copy together with a copy of any related book, to a person’s lawyer if the lawyer satisfies ASIC that the person is carrying on, or is contemplating in good faith, proceedings in relation to a matter to which the examination related.

             (2)  If ASIC gives a copy to a person under subsection (1), the person, or any other person who has possession, custody or control of the copy or a copy of it, must not, except in connection with preparing, beginning or carrying on, or in the course of, proceedings:

                     (a)  use the copy or a copy of it; or

                     (b)  publish, or communicate to a person, the copy, a copy of it, or any part of the copy’s contents.

Criminal penalty:    10 penalty units, or 3 months imprisonment, or both.

             (3)  Subsection (2) is an offence of strict liability.

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

             (4)  ASIC may, subject to such conditions (if any) as it imposes, give to a person a copy of a written record of the examination, or such a copy together with a copy of any related book.

260  Copies given subject to conditions

             (1)  If a copy is given to a person under subsection 258(2) or 259(4) subject to conditions, the person, and any other person who has possession, custody or control of the copy or a copy of it, must comply with the conditions.

Criminal penalty:    10 penalty units, or 3 months imprisonment, or both.

             (2)  Subsection (1) is an offence of strict liability.

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

261  Record to accompany report

             (1)  If a report about the investigation referred to in section 254 is prepared under section 250, each record (if any) of the examination must accompany the report.

             (2)  If:

                     (a)  in ASIC’s opinion, a statement made at an examination is relevant to any other investigation under Part 6‑1; and

                     (b)  a record of the statement was made under section 258; and

                     (c)  a report about the other investigation is prepared under section 250;

a copy of the record must accompany the report.


 

Part 6‑3Inspection of books and audit information‑gathering powers

Division 1Introduction

262  Guide to this Part

This Part is about powers of ASIC in relation to the inspection of books and gathering of information about audits.

Division 2 includes powers of ASIC to inspect books, and to require persons to produce books or documents, or give information, in some circumstances.

Division 2 also allows ASIC to seize books in certain circumstances, and sets out procedures to be followed in relation to such a seizure, including in relation to the granting of warrants.


 

Division 2Inspection of books and audit information‑gathering powers

263  When certain powers may be exercised

                   A power conferred by this Part (other than sections 264, 265, 269 and 270) may only be exercised:

                     (a)  for the purposes of the performance or exercise of any of ASIC’s functions and powers under the Commonwealth credit legislation; or

                     (b)  for the purposes of ensuring compliance with the Commonwealth credit legislation; or

                     (c)  in relation to an alleged or suspected contravention of the credit legislation; or

                     (d)  in relation to a contravention of a law of the Commonwealth, or of a law of a referring State or a Territory, being a contravention that:

                              (i)  concerns the management, conduct or affairs of a licensee, credit representative or other person who engages, or has engaged, in a credit activity; or

                             (ii)  involves fraud or dishonesty and relates to a credit activity engaged in by a person, or a credit contract, mortgage, guarantee or consumer lease; or

                     (e)  for the purposes of an investigation under Part 6‑1.

264  ASIC may inspect books without charge

             (1)  A book that the Commonwealth credit legislation requires a person to keep must be open for inspection (without charge) by a person authorised in writing by ASIC.

             (2)  A person (the authorised person) authorised under this section may require a person in whose possession, custody or control the book is to make the book available for inspection by the authorised person.

Note:          Failure to comply with a requirement made under this subsection is an offence (see section 290).

             (3)  An offence under subsection 290(2) relating to subsection (2) of this section is an offence of strict liability.

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

             (4)  An authorisation under this section may be of general application or may be limited by reference to the books to be inspected.

265  Notice to auditors concerning information and books

             (1)  Subject to subsection (2), ASIC may give an auditor who prepares an audit report required under the Commonwealth credit legislation a written notice requiring the auditor:

                     (a)  to give specified information; or

                     (b)  to produce specified books;

to a specified ASIC member or ASIC staff member at a specified place and time.

Note:          Failure to comply with a requirement made under this subsection is an offence (see section 290).

             (2)  The power in subsection (1) may only be exercised:

                     (a)  for the purposes of ascertaining compliance with audit requirements under the Commonwealth credit legislation; or

                     (b)  in relation to an alleged or suspected contravention of audit requirements under the Commonwealth credit legislation; or

                     (c)  in relation to an alleged or suspected contravention of a law of the Commonwealth, or of a law of a referring State or a Territory, being a contravention that:

                              (i)  concerns the management, conduct or affairs of a licensee, credit representative or other person who engages, or has engaged, in a credit activity; or

                             (ii)  involves fraud or dishonesty and relates to a credit activity engaged in by a person, or a credit contract, mortgage, guarantee or consumer lease; or

                     (d)  for the purposes of an investigation under Part 6‑1 relating to a contravention referred to in paragraph (b) or (c).

             (3)  Without limiting subsection (1), a notice under that subsection may specify information or books that relate to any or all of the following:

                     (a)  the policies relating to audit that the auditor has adopted or proposes to adopt, or the procedures relating to audit that the auditor has put in place or proposes to put in place;

                     (b)  audits the auditor has conducted or proposes to conduct or in which the auditor has participated or proposes to participate;

                     (c)  any other matter pertaining to audit that is prescribed by the regulations for the purposes of this paragraph.

             (4)  Without limiting subsection (1), a notice under that subsection may require the auditor to give information or produce books even if doing so would involve a breach of an obligation of confidentiality that the auditor owes an audited person.

             (5)  ASIC may, by written notice to an auditor who has received a notice under subsection (1), extend the period within which the auditor must give the information or produce the books to which the notice under that subsection relates.

266  Notice to produce books about credit activities

                   ASIC may give to:

                     (a)  a person who engages in a credit activity (either alone or together with any other person or persons); or

                     (b)  a person who, in ASIC’s opinion, has been a party to engaging in a credit activity; or

                     (c)  a representative, banker, lawyer or auditor of a person referred to in paragraph (a) or (b);

a written notice requiring the production to a specified ASIC member or ASIC staff member, at a specified place and time, of specified books relating to:

                     (d)  a credit activity engaged in by a person; or

                     (e)  the character or financial situation of, or a business carried on by, a person who engages, or has engaged, in a credit activity.

Note:          Failure to comply with a requirement made under this subsection is an offence (see section 290).

267  Notice to produce documents in person’s possession

             (1)  ASIC may give to a person (the recipient) a written notice requiring the production to a specified ASIC member or ASIC staff member, at a specified place and time, of specified books that are in the recipient’s possession, custody or control and relate to:

                     (a)  affairs of a licensee, credit representative or other person who engages, or has engaged, in a credit activity; or

                     (b)  a matter referred to in paragraph 266(1)(d) or (e).

             (2)  ASIC may give to a person (the recipient) a written notice requiring the production to a specified ASIC member or ASIC staff member, at a specified place and time, of specified books that are in the recipient’s possession, custody or control and that relate to the question whether an auditor has complied with audit requirements under the Commonwealth credit legislation.

Note:          Failure to comply with a requirement made under this section is an offence (see section 290).

268  ASIC may authorise persons to require production of books, giving of information etc.

             (1)  ASIC may by writing authorise an ASIC member or ASIC staff member (an authorised person) to make a requirement of a kind that this Part empowers ASIC to make.

Note:          Failure to comply with a requirement made under this subsection is an offence (see section 290).

             (2)  An authorisation under this section may be of general application or may be limited by reference to all or any of the following:

                     (a)  the persons of whom requirements may be made;

                     (b)  the books that may be required to be produced;

                     (c)  the information that may be required to be given.

             (3)  If an authorisation of an authorised person is in force under this section, the authorised person may make a requirement in accordance with the authorisation as if, in sections 265, 266 and 267:

                     (a)  a reference to ASIC were a reference to the authorised person; and

                     (b)  a reference to specified books were a reference to books that the authorised person specifies, whether in the requirement or not and whether orally or in writing, to the person of whom the requirement is made; and

                     (c)  a reference to specified information were a reference to information that the authorised person specifies, whether in the requirement or not and whether orally or in writing, to the person of whom the requirement is made; and

                     (d)  a reference to giving or producing to a specified person were a reference to giving or producing to the authorised person.

269  Application for warrant to seize books not produced

             (1)  If an ASIC member or ASIC staff member has reasonable grounds to suspect that there are, or may be within the next 3 days, on particular premises in Australia, books:

                     (a)  whose production has been required under this Part; and

                     (b)  that have not been produced in compliance with that requirement;

he or she may:

                     (c)  lay before a magistrate an information on oath setting out those grounds; and

                     (d)  apply for the issue of a warrant to search the premises for those books.

             (2)  On an application under this section, the magistrate may require further information to be given, either orally or by affidavit, in connection with the application.

270  Grant of warrant

             (1)  This section applies if, on an application under section 269, the magistrate is satisfied that there are reasonable grounds to suspect that there are, or may be within the next 3 days, on particular premises, particular books:

                     (a)  whose production has been required under this Part; and

                     (b)  that have not been produced in compliance with that requirement.

             (2)  The magistrate may issue a warrant authorising a member of the Australian Federal Police, whether or not named in the warrant, together with any person so named, with such assistance, and by such force, as is necessary and reasonable:

                     (a)  to enter on or into the premises; and

                     (b)  to search the premises; and

                     (c)  to break open and search anything, whether a fixture or not, in or on the premises; and

                     (d)  to take possession of, or secure against interference, books that appear to be any or all of those books.

             (3)  If the magistrate issues such a warrant, he or she must set out on the information laid before him or her under subsection 269(2) for the purposes of the application:

                     (a)  which of the grounds set out in the information; and

                     (b)  particulars of any other grounds;

he or she has relied on to justify the issue of the warrant.

             (4)  A warrant under this section must:

                     (a)  specify the premises and books referred to in subsection (1); and

                     (b)  state whether entry is authorised to be made at any time of the day or night or only during specified hours; and

                     (c)  state that the warrant ceases to have effect on a specified day that is not more than 7 days after the day of issue of the warrant.

271  Powers if books produced or seized

             (1)  This section applies if:

                     (a)  books are produced to a person under a requirement made under this Part; or

                     (b)  under a warrant issued under section 270, a person:

                              (i)  takes possession of books; or

                             (ii)  secures books against interference; or

                     (c)  by virtue of a previous application of subsection (8) of this section, books are delivered into a person’s possession.

             (2)  If paragraph (1)(a) applies, the person may take possession of any of the books.

             (3)  The person may inspect, and may make copies of, or take extracts from, any of the books.

             (4)  The person may use, or permit the use of, any of the books for the purposes of proceedings.

             (5)  The person may retain possession of any of the books for so long as is necessary:

                     (a)  for the purposes of exercising a power conferred by this section (other than this subsection and subsection (7)); or

                     (b)  for any of the purposes referred to in paragraphs 263(a), (b) and (e) or 265(2)(a) and (d), as the case requires; or

                     (c)  for a decision to be made about whether or not proceedings (including proceedings under a law of the Commonwealth, or a law of a referring State or a Territory) to which the books concerned would be relevant should be begun; or

                     (d)  for such proceedings to be begun and carried on.

             (6)  No‑one is entitled, as against the person, to claim a lien on any of the books, but such a lien is not otherwise prejudiced.

             (7)  While the books are in the possession of a person (the possessor), the possessor:

                     (a)  must permit another person to inspect at all reasonable times such (if any) of the books as the other person would be entitled to inspect if they were not in the possessor’s possession; and

                     (b)  may permit another person to inspect any of the books.

             (8)  Unless subparagraph (1)(b)(ii) applies, the person may deliver any of the books into the possession of ASIC or of a person authorised by it to receive them.

             (9)  If paragraph (1)(a) or (b) applies, the person, or a person into whose possession the person delivers any of the books under subsection (8), may require:

                     (a)  if paragraph (1)(a) applies—a person who so produced any of the books; or

                     (b)  in any case—a person who was a party to the compilation of any of the books;

to explain any matter about the compilation of any of the books or to which any of the books relate.

Note:          Failure to comply with a requirement made under this subsection is an offence (see section 290).

272  Powers if books not produced

                   If a person (the first person) fails or refuses to produce particular books in compliance with a requirement made by another person under this Part, the other person may require the first person to state:

                     (a)  if the books may be found; and

                     (b)  who last had possession, custody or control of the books and if that person may be found.

Note:          Failure to comply with a requirement made under this subsection is an offence (see section 290).


 

Part 6‑4Proceedings after an investigation

Division 1Introduction

273  Guide to this Part

This Part is about criminal and civil proceedings that ASIC may bring after it has conducted an investigation under this Chapter.

Division 2 deals with criminal proceedings. After an investigation of a person under this Chapter, ASIC may prosecute the person for an offence against the Commonwealth credit legislation (i.e. this Act or the National Credit Transitional Act). It may also require others to provide it with reasonable assistance in connection with the prosecution.

Division 2 also deals with civil proceedings. After an investigation of a person under this Chapter, ASIC may bring civil proceedings against a person in particular circumstances. However, under this Division, ASIC cannot bring civil proceedings under the Commonwealth credit legislation. This is because Part 4‑2 (which deals with remedies) and the National Credit Code deal with when ASIC can bring those proceedings.


 

Division 2Proceedings after an investigation

274  ASIC may prosecute

             (1)  This section applies if:

                     (a)  as a result of an investigation; or

                     (b)  from a record of an examination;

conducted under this Chapter, it appears to ASIC that a person:

                     (c)  may have committed an offence against the Commonwealth credit legislation; and

                     (d)  ought to be prosecuted for the offence.

             (2)  ASIC may cause a prosecution of the person for the offence to be brought and carried on.

             (3)  ASIC may make a requirement under subsection (4) if:

                     (a)  ASIC, on reasonable grounds, suspects or believes that a person can give information relevant to a prosecution for the offence; or

                     (b)  the offence relates to matters being, or connected with, affairs of a licensee, credit representative or other person who engages, or has engaged, in a credit activity, or to matters including such matters.

             (4)  ASIC may, whether before or after a prosecution for the offence is begun, by writing given to any of the following persons:

                     (a)  the person referred to in paragraph (3)(a);

                     (b)  a representative, banker, lawyer or auditor of a person referred to in paragraph (3)(b);

require the person to give all reasonable assistance in connection with such a prosecution.

Note:          Failure to comply with a requirement made under this subsection is an offence (see section 290).

             (5)  An offence under subsection 290(2) relating to subsection (4) of this section is an offence of strict liability.

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

             (6)  Subsection (4) does not apply in relation to:

                     (a)  the person referred to in subsection (1); or

                     (b)  a person who is or has been that person’s lawyer.

Note:          A defendant bears an evidential burden in relation to the matter in subsection (6), see subsection 13.3(3) of the Criminal Code.

             (7)  A requirement made by ASIC under subsection (4) is not a legislative instrument.

             (8)  Nothing in this section affects the operation of the Director of Public Prosecutions Act 1983.

275  ASIC may bring civil proceedings

                   If, as a result of an investigation or from a record of an examination (being an investigation or examination conducted under this Chapter), it appears to ASIC to be in the public interest for a person to bring and carry on proceedings (other than proceedings under the Commonwealth credit legislation) for:

                     (a)  the recovery of damages for fraud, negligence, default, breach of duty, or other misconduct, committed in connection with a matter to which the investigation or examination related; or

                     (b)  recovery of property of the person;

ASIC:

                     (c)  if the person is a company (within the meaning of the Corporations Act 2001)—may cause; or

                     (d)  otherwise—may, with the person’s written consent, cause;

such proceedings to be begun and carried on in the person’s name.


 

Part 6‑5Hearings

Division 1Introduction

276  Guide to this Part

This Part is about hearings held by ASIC.

Division 2 gives ASIC the power to hold hearings for the purpose of the performance of its functions and powers under the Commonwealth credit legislation (other than Part 6‑1).

Division 2 also includes rules and procedures for the conduct of hearings, including rules in relation to whether the hearing is conducted in private, and rules in relation to evidence and proceedings at hearings.


 

Division 2Hearings

277  Power to hold hearings

                   ASIC may hold hearings for the purposes of the performance or exercise of any of its functions and powers under the Commonwealth credit legislation, other than a function or power conferred on it by Part 6‑1 (which deals with investigations).

278  General discretion to hold hearing in public or private

             (1)  Subject to sections 279 and 280, ASIC may direct that a hearing take place in public or take place in private.

             (2)  In exercising its discretion under subsection (1), ASIC must have regard to:

                     (a)  whether evidence that may be given, or a matter that may arise, during the hearing is of a confidential nature or relates to the commission, or to the alleged or suspected commission, of an offence against a law of the Commonwealth, a State or a Territory; and

                     (b)  any unfair prejudice to a person’s reputation that would be likely to be caused if the hearing took place in public; and

                     (c)  whether it is in the public interest that the hearing take place in public; and

                     (d)  any other relevant matter.

279  Request by person appearing at hearing that it take place in public

             (1)  Subject to section 280, if:

                     (a)  the Commonwealth credit legislation requires ASIC to give a person an opportunity to appear at a hearing; and

                     (b)  the person requests that the hearing or part of the hearing take place in public;

the hearing or part must take place in public.

             (2)  Despite subsection (1), if ASIC is satisfied, having regard to the matters referred to in subsection 278(2), that it is desirable that a hearing or part of a hearing take place in private, it may direct that the hearing or part take place in private.

             (3)  If a direction given under subsection (2) is in writing, it is not a legislative instrument.

280  Certain hearings to take place in private

                   If the Commonwealth credit legislation (other than this section) requires a hearing to take place in private, the hearing must take place in private.

281  ASIC may restrict publication of certain material

             (1)  If, at a hearing that is taking place in public or in private, ASIC is satisfied that it is desirable to do so, ASIC may give directions preventing or restricting the publication of evidence given before, or of matters contained in documents lodged with, ASIC.

Note:          Failure to comply with a direction given under this subsection is an offence (see section 293).

             (2)  In determining whether or not to give a direction under subsection (1), ASIC must have regard to:

                     (a)  whether evidence that has been or may be given, or a matter that has arisen or may arise, during the hearing is of a confidential nature or relates to the commission, or to the alleged or suspected commission, of an offence against a law of the Commonwealth, a State or a Territory; and

                     (b)  any unfair prejudice to a person’s reputation that would be likely to be caused unless ASIC exercises its powers under this section; and

                     (c)  whether it is in the public interest that ASIC exercises its powers under this section; and

                     (d)  any other relevant matter.

             (3)  If a direction given under subsection (1) is in writing, it is not a legislative instrument.

282  Who may be present when hearing takes place in private

             (1)  ASIC may give directions about who may be present during a hearing that is to take place in private.

             (2)  A direction under subsection (1) does not prevent:

                     (a)  a pe