Contents
Chapter 1—Introduction 1
Part 1‑1—Introduction 1
1............ Short title............................................................................................. 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 18
6............ Meaning of credit activity.................................................................. 18
7............ Meaning of credit service.................................................................. 19
8............ Meaning of credit assistance............................................................ 19
9............ Meaning of acts as an intermediary................................................. 20
10.......... Assignees of credit providers, lessors, mortgagees and beneficiaries of a guarantee 21
Division 4—Other definitions 22
11.......... Meaning of approved external dispute resolution scheme................ 22
12.......... When a business is carried on in this jurisdiction............................ 22
13.......... Meaning of misleading..................................................................... 22
14.......... Meaning of person—generally includes a partnership...................... 23
15.......... Meaning of person—generally includes multiple trustees................. 23
16.......... Qualified privilege............................................................................. 25
Part 1‑3—Application of this Act and the Transitional Act 26
Division 1—Introduction 26
17.......... Guide to this Part.............................................................................. 26
Division 2—Constitutional basis and application of this Act and the Transitional Act 27
18.......... Constitutional basis for this Act and the Transitional Act................. 27
19.......... Meaning of referring State................................................................ 28
20.......... Meaning of referred credit matter.................................................... 32
21.......... General application of this Act and the Transitional Act................... 32
22.......... When Acts bind Crown.................................................................... 33
Division 3—Interaction between the Commonwealth credit legislation and State and Territory laws 35
23.......... Concurrent operation intended.......................................................... 35
24.......... When Commonwealth credit legislation does not apply.................... 35
25.......... Avoiding direct inconsistency between Commonwealth and State and Territory laws 36
26.......... Regulations to deal with interaction between laws............................ 38
Chapter 2—Licensing of persons who engage in credit activities 40
Part 2‑1—Requirement to be licensed to engage in credit activities 40
Division 1—Introduction 40
27.......... Guide to this Part.............................................................................. 40
Division 2—Engaging in credit activities without a licence 41
28.......... Application of this Division.............................................................. 41
29.......... Prohibition on engaging in credit activities without a licence............ 41
Division 3—Other prohibitions relating to the requirement to be licensed 43
30.......... Prohibitions on holding out and advertising etc................................ 43
31.......... Prohibition on conducting business with unlicensed persons........... 44
32.......... Prohibition on charging a fee etc....................................................... 44
Part 2‑2—Australian credit licences 46
Division 1—Introduction 46
34.......... Guide to this Part.............................................................................. 46
Division 2—Australian credit licences 47
35.......... Australian credit licences................................................................... 47
Division 3—How to get an Australian credit licence 48
36.......... Applying for a licence....................................................................... 48
37.......... When a licence may be granted—applicants other than ADIs........... 48
38.......... When a licence may be granted—ADIs............................................ 50
39.......... Regulations may prescribe streamlined process for other applicants. 51
40.......... Licences must not be granted to certain applicants............................ 51
41.......... Applicant must be given hearing before refusal of licence................ 52
42.......... Notice of grant or refusal of licence and date of effect...................... 52
43.......... Australian credit licence numbers...................................................... 52
44.......... Basis on which licence is granted...................................................... 53
Division 4—Conditions on an Australian credit licence 54
45.......... The conditions on the licence............................................................ 54
46.......... Licence conditions—special procedures for APRA‑regulated bodies 55
Division 5—Obligations of licensees 57
47.......... General conduct obligations of licensees........................................... 57
48.......... Requirements for compensation arrangements.................................. 58
49.......... Obligation to provide a statement or obtain an audit report if directed by ASIC 59
50.......... Obligation to give ASIC information required by the regulations..... 61
51.......... Obligation to provide ASIC with assistance if reasonably requested 62
52.......... Obligation to cite Australian credit licence number........................... 63
53.......... Obligation to lodge annual compliance certificate.............................. 63
Division 6—When a licence can be suspended, cancelled or varied 66
Subdivision A—Suspensions and cancellations 66
54.......... Suspension or cancellation without hearing...................................... 66
55.......... Suspension or cancellation after offering a hearing........................... 67
56.......... Suspension and cancellation—special procedures for APRA‑regulated bodies 68
Subdivision B—Variations 69
57.......... Varying licences................................................................................ 69
Subdivision C—Miscellaneous rules about suspensions, cancellations and variations 69
58.......... Effect of suspension.......................................................................... 69
59.......... Revocation of suspension................................................................. 69
60.......... Date of effect, notice and publication of variation, cancellation or suspension etc. 70
61.......... Statement of reasons......................................................................... 70
62.......... ASIC may allow licence to continue in force.................................... 70
Part 2‑3—Credit representatives and other representatives of licensees 71
Division 1—Introduction 71
63.......... Guide to this Part.............................................................................. 71
Division 2—Authorisation of credit representatives 72
64.......... Licensee may authorise credit representatives................................... 72
65.......... Credit representative that is a body corporate may sub‑authorise natural persons as credit representatives 73
66.......... Credit representative of 2 or more licensees...................................... 74
67.......... A person cannot be a credit representative in relation to credit activities authorised by a person’s licence 75
68.......... Variation and revocation of authorisations and sub‑authorisations... 75
69.......... Obligation not to give authorisation that has no effect....................... 76
70.......... Obligation to vary or revoke authorisation that ceases to have effect 76
71.......... Obligation to notify ASIC etc. about credit representatives............... 77
72.......... Credit representative numbers........................................................... 79
Division 3—Information about representatives 80
73.......... ASIC may give licensee information about representatives............... 80
Division 4—Liability of licensees for representatives 83
74.......... Application of this Division.............................................................. 83
75.......... Responsibility if representative of only one licensee......................... 83
76.......... Representatives of multiple licensees................................................ 83
77.......... Responsibility extends to loss or damage suffered by client............. 84
78.......... Effect of this Division....................................................................... 84
Part 2‑4—Banning or disqualification of persons from engaging in credit activities 86
Division 1—Introduction 86
79.......... Guide to this Part.............................................................................. 86
Division 2—Banning orders 87
80.......... ASIC’s power to make a banning order............................................ 87
81.......... What is a banning order?.................................................................. 89
82.......... Effect of banning orders.................................................................... 89
83.......... Variation or cancellation of banning orders....................................... 90
84.......... Date of effect, notice and publication of banning order, variation or cancellation 90
85.......... Statement of reasons......................................................................... 91
Division 3—Disqualification by the court 92
86.......... Disqualification by the court............................................................. 92
Part 2‑5—Financial records, trust accounts and audit reports 93
Division 1—Introduction 93
87.......... Guide to this Part.............................................................................. 93
Division 2—Financial records of licensees 94
88.......... Obligation to keep financial records.................................................. 94
89.......... How financial records are to be kept................................................. 95
90.......... Language of financial records........................................................... 95
91.......... Location of financial records............................................................. 95
92.......... Information to be shown in financial records.................................... 96
93.......... Regulations may impose additional requirements.............................. 96
94.......... Financial records taken to be made with licensee’s authority............ 97
95.......... Obligation to retain financial records for 7 years............................... 97
96.......... Financial records are prima facie evidence of matters........................ 98
Division 3—Trust accounts of credit service licensees 99
97.......... Application of this Division.............................................................. 99
98.......... Obligation for credit service licensees to maintain trust account........ 99
99.......... Obligations in relation to trust account money................................ 100
100........ Obligation to lodge trust account statement and trust account audit report 101
101........ Time of lodgment of trust account statement and trust account audit report 102
Division 4—Matters relating to audit reports 104
102........ Auditor’s right of access to records, information etc....................... 104
103........ Auditor’s fees and expenses........................................................... 105
104........ Auditor to report on certain matters................................................. 105
105........ Qualified privilege for auditor etc.................................................... 106
106........ Regulations in relation to audit reports etc....................................... 107
Part 2‑6—Exemptions and modifications relating to this Chapter 108
Division 1—Introduction 108
107........ Guide to this Part............................................................................ 108
Division 2—Exemptions and modifications relating to this Chapter 109
108........ Provisions to which this Part applies.............................................. 109
109........ Exemptions and modifications by ASIC......................................... 109
110........ Exemptions and modifications by the regulations........................... 111
Chapter 3—Responsible lending conduct 112
Part 3‑1—Licensees that provide credit assistance in relation to credit contracts 112
Division 1—Introduction 112
111........ Guide to this Part............................................................................ 112
112........ Application of this Part................................................................... 113
Division 2—Credit guide of credit assistance providers 114
113........ Credit guide of credit assistance providers...................................... 114
Division 3—Quote for providing credit assistance etc. in relation to credit contracts 117
114........ Quote for providing credit assistance etc......................................... 117
Division 4—Obligations of credit assistance providers before providing credit assistance for credit contracts 120
115........ Obligations of credit assistance providers before providing credit assistance for credit contracts 120
116........ Preliminary assessment of unsuitability of the credit contract......... 121
117........ Reasonable inquiries etc. about the consumer................................. 121
118........ When the credit contract must be assessed as unsuitable—entering contract or increasing the credit limit 122
119........ When the credit contract must be assessed as unsuitable—remaining in credit contract 124
120........ Providing the consumer with the preliminary assessment............... 125
Division 5—Fees, commissions etc. relating to credit contracts 127
121........ Fees, commissions etc. relating to credit contracts.......................... 127
122........ No profiting from fees etc. paid to third parties............................... 128
Division 6—Prohibition on suggesting, or assisting with, unsuitable credit contracts 130
123........ Prohibition on suggesting or assisting consumers to enter, or increase the credit limit under, unsuitable credit contracts........................................................................................................ 130
124........ Prohibition on suggesting to consumers to remain in unsuitable credit contracts 132
Division 7—Special rules for short‑term and small amount credit contracts 135
124A..... Prohibition on providing credit assistance in relation to short‑term credit contracts 135
124B..... Licensee who makes representations about credit assistance in relation to small amount credit contracts must display information etc................................................................................ 135
Part 3‑2—Licensees that are credit providers under credit contracts: general rules 137
Division 1—Introduction 137
125........ Guide to this Part............................................................................ 137
Division 2—Credit guide of credit providers 138
126........ Credit guide of credit providers....................................................... 138
127........ Credit guide of credit providers who are assignees......................... 139
Division 3—Obligation to assess unsuitability 141
128........ Obligation to assess unsuitability.................................................... 141
129........ Assessment of unsuitability of the credit contract........................... 141
130........ Reasonable inquiries etc. about the consumer................................. 142
131........ When credit contract must be assessed as unsuitable...................... 143
132........ Giving the consumer the assessment............................................... 144
Division 4—Prohibition on entering, or increasing the credit limit of, unsuitable credit contracts 147
133........ Prohibition on entering, or increasing the credit limit of, unsuitable credit contracts 147
Part 3‑2A—Licensees that are credit providers under credit contracts: additional rules relating to standard home loans 150
Division 1—Introduction 150
133A..... Guide to this Part............................................................................ 150
Division 2—Key Facts Sheets for standard home loans 151
133AA.. What is a standard home loan?....................................................... 151
133AB.. What is a Key Facts Sheet for a standard home loan?...................... 151
133AC.. Credit provider’s website to provide capacity to generate Key Facts Sheet 152
133AD.. Credit provider to provide Key Facts Sheet in other situations........ 153
133AE... What if more information is needed from the consumer?................ 154
133AF... Defences to obligation to provide a Key Facts Sheet....................... 155
Part 3‑2B—Licensees that are credit providers under credit contracts: additional rules relating to credit card contracts 157
Division 1—Introduction 157
133B..... Guide to this Part............................................................................ 157
Division 2—Credit card contracts and related concepts 158
133BA.. Meaning of credit card contract etc................................................ 158
Division 3—Key Facts Sheets for credit card contract 160
133BB... What is a Key Facts Sheet for a credit card contract?....................... 160
133BC... Application form for credit card contract to include up‑to‑date Key Facts Sheet 160
133BD.. Credit provider not to enter into credit card contract unless Key Facts Sheet has been provided etc. 161
Division 4—Offers etc. to increase credit limit of credit card contract 163
133BE... Credit provider not to offer etc. to increase credit limit of credit card contract 163
133BF... Informed consent of the consumer to the making of credit limit increase invitations 164
133BG.. Records of consents and withdrawals to be kept............................. 166
Division 5—Use of credit card in excess of credit limit 167
133BH.. Credit provider to notify consumer of use of credit card in excess of credit limit 167
133BI.... Credit provider not to impose fees etc. because credit card used in excess of credit limit 168
133BJ.... Records of consents and withdrawals to be kept............................. 169
Division 6—Order of application of payments made under credit card contracts 170
133BO.. Credit provider to apply payments in accordance with this Division 170
133BP... Agreement to apply payment against particular amount owed......... 171
133BQ.. Application of payment against last statement balance, with higher interest debts to be discharged first 172
133BR... Application of any remaining part of the relevant payment............. 172
Part 3‑2C—Licensees that are credit providers under credit contracts: additional rules relating to short‑term and small amount credit contracts 173
Division 1—Introduction 173
133C..... Guide to this Part............................................................................ 173
Division 2—Short‑term and small amount credit contracts 174
133CA.. Prohibition on entering, or increasing the credit limit of, short‑term credit contracts 174
133CB... Licensee who makes representations about small amount credit contracts must display information etc. 174
133CC... Licensee must not enter into a small amount credit contract if the repayments do not meet the prescribed requirements........................................................................................................ 175
Part 3‑2D—Licensees and reverse mortgages 177
133DA.. Guide to this Part............................................................................ 177
133DB.. Giving projections of equity before providing credit assistance or entering credit contract 177
133DC.. Making reverse mortgage information statement available on website of credit provider or credit assistance provider........................................................................................................ 179
133DD.. Making reverse mortgage information statement available in other situations 180
133DE... Representations that use the term “reverse mortgage” etc................ 181
Part 3‑3—Licensees that provide credit assistance in relation to consumer leases 183
Division 1—Introduction 183
134........ Guide to this Part............................................................................ 183
135........ Application of this Part................................................................... 184
Division 2—Credit guide of credit assistance providers 185
136........ Credit guide of credit assistance providers...................................... 185
Division 3—Quote for providing credit assistance etc. in relation to consumer leases 188
137........ Quote for providing credit assistance etc......................................... 188
Division 4—Obligations of credit assistance providers before providing credit assistance for consumer leases 190
138........ Obligations of credit assistance providers before providing credit assistance for consumer leases 190
139........ Preliminary assessment of unsuitability of the consumer lease....... 191
140........ Reasonable inquiries etc. about the consumer................................. 191
141........ When the consumer lease must be assessed as unsuitable—entering lease 192
142........ When the consumer lease must be assessed as unsuitable—remaining in lease 193
143........ Providing the consumer with the preliminary assessment............... 194
Division 5—Fees, commissions etc. relating to consumer leases 196
144........ Fees, commissions etc. relating to consumer leases........................ 196
145........ No profiting from fees etc. paid to third parties............................... 197
Division 6—Prohibition on suggesting, or assisting with, unsuitable consumer leases 198
146........ Prohibition on suggesting, or assisting with, unsuitable consumer leases 198
147........ Prohibition on suggesting to consumers to remain in unsuitable consumer leases 200
Part 3‑4—Licensees that are lessors under consumer leases 203
Division 1—Introduction 203
148........ Guide to this Part............................................................................ 203
Division 2—Credit guide of lessors 204
149........ Credit guide of lessors.................................................................... 204
150........ Credit guide of lessors who are assignees....................................... 205
Division 3—Obligation to assess unsuitability 207
151........ Obligation to assess unsuitability.................................................... 207
152........ Assessment of unsuitability of the consumer lease......................... 207
153........ Reasonable inquiries etc. about the consumer................................. 207
154........ When consumer lease must be assessed as unsuitable.................... 208
155........ Giving the consumer the assessment............................................... 209
Division 4—Prohibition on entering unsuitable consumer leases 212
156........ Prohibition on entering unsuitable consumer leases........................ 212
Part 3‑5—Credit representatives 214
Division 1—Introduction 214
157........ Guide to this Part............................................................................ 214
Division 2—Credit guide of credit representatives 215
158........ Credit guide of credit representatives.............................................. 215
Part 3‑6—Debt collectors 218
Division 1—Introduction 218
159........ Guide to this Part............................................................................ 218
Division 2—Credit guide of debt collectors 219
160........ Credit guide of debt collectors......................................................... 219
Part 3‑6A—Miscellaneous rules 221
Division 1—Introduction 221
160A..... Guide to this Part............................................................................ 221
Division 2—Representations 222
160B..... “Independent”, “impartial” or “unbiased” etc.................................. 222
160C..... “Financial counsellor” etc................................................................ 223
Division 3—Giving misleading information 225
160D..... Prohibition on giving misleading information etc............................ 225
Division 4—Giving authorisation for deductions by employer of debtor or lessee 226
160E...... Requirements for giving authorisation to employer......................... 226
Part 3‑7—Exemptions and modifications relating to this Chapter 228
Division 1—Introduction 228
161........ Guide to this Part............................................................................ 228
Division 2—Exemptions and modifications relating to this Chapter 229
162........ Provisions to which this Part applies.............................................. 229
163........ Exemptions and modifications by ASIC......................................... 229
164........ Exemptions and modifications by the regulations........................... 230
Chapter 4—Remedies 232
Part 4‑1—Civil penalty provisions 232
Division 1—Introduction 232
165........ Guide to this Part............................................................................ 232
Division 2—Declarations and pecuniary penalty orders for contraventions of civil penalty provisions 233
166........ Declaration of contravention of civil penalty provision................... 233
167........ Court may order person to pay pecuniary penalty for contravening civil penalty provision 233
Division 3—General provisions relating to civil penalty provisions 235
168........ Contravening a civil penalty provision is not an offence................. 235
169........ Involvement in contravention treated in same way as actual contravention 235
170........ Civil evidence and procedure rules for proceedings relating to civil penalty provisions 235
171........ Criminal proceedings before civil proceedings................................ 235
172........ Criminal proceedings during civil proceedings............................... 235
173........ Criminal proceedings after civil proceedings................................... 236
174........ Evidence given in proceedings for pecuniary penalty not admissible in criminal proceedings 236
175........ Civil double jeopardy...................................................................... 236
Part 4‑2—Power of the court to grant remedies 238
Division 1—Introduction 238
176........ Guide to this Part............................................................................ 238
Division 2—Power of the court to grant remedies 239
177........ Injunctions...................................................................................... 239
178........ Compensation orders...................................................................... 240
179........ Other orders to compensate loss or damage.................................... 241
180........ Orders in relation to unlawful credit activities................................. 244
180A..... Orders to remedy unfair or dishonest conduct by credit service providers 246
181........ Preference must be given to compensate consumers....................... 249
182........ Adverse publicity orders................................................................. 249
183........ Relief from liability for contravention of civil penalty provision..... 250
184........ Multiple remedies may be granted................................................... 250
Part 4‑3—Jurisdiction and procedure of courts 251
Division 1—Introduction 251
185........ Guide to this Part............................................................................ 251
Division 2—Civil proceedings 252
Subdivision A—Application of this Division 252
186........ Application of this Division............................................................ 252
Subdivision B—Conferral of civil jurisdiction 252
187........ Civil jurisdiction of courts............................................................... 252
188........ Jurisdiction—decisions to prosecute and related criminal justice process decisions made by Commonwealth officers........................................................................................................ 253
189........ Cross‑jurisdictional appeals............................................................ 255
190........ Courts to act in aid of each other..................................................... 256
Subdivision C—Transfers between courts 256
191........ Transfers—application of Subdivision............................................ 256
192........ Transfers—exercise of transfer power............................................ 257
193........ Transfers—criteria for transfer........................................................ 258
194........ Transfers—how initiated................................................................. 259
195........ Transfers—documents and procedure............................................. 259
196........ Transfers—conduct of proceedings................................................ 259
197........ Transfers—entitlement to practise as a lawyer................................ 260
198........ Transfers—limitation on appeals..................................................... 260
Subdivision D—Other matters 260
199........ Plaintiffs may choose small claims procedure................................. 260
200........ Costs only if proceedings brought vexatiously etc.......................... 266
201........ Civil proceedings not to be stayed................................................... 266
202........ Standard of proof in civil proceedings............................................ 266
Division 3—Criminal proceedings 268
Subdivision A—Application of this Division 268
203........ Application of this Division............................................................ 268
Subdivision B—Conferral of criminal jurisdiction 268
204........ Criminal jurisdiction of courts......................................................... 268
205........ Criminal proceedings—laws to be applied...................................... 271
206........ Criminal proceedings—how taken.................................................. 272
207........ Certain persons to assist in prosecutions......................................... 272
208........ Privilege against self‑incrimination not available to bodies corporate in criminal proceedings 273
Division 4—Proceedings generally 274
209........ ASIC’s power to intervene in proceedings..................................... 274
210........ Evidence of contravention............................................................... 274
211........ Power of court to punish for contempt of court.............................. 275
Chapter 5—Administration 276
Part 5‑1—Registers relating to credit activities 276
Division 1—Introduction 276
212........ Guide to this Part............................................................................ 276
Division 2—Registers relating to credit activities 277
213........ Credit registers................................................................................ 277
214........ Inspection and public availability of credit registers........................ 278
Part 5‑2—Documents lodged with ASIC or required by this Act 279
Division 1—Introduction 279
215........ Guide to this Part............................................................................ 279
Division 2—Lodgment of documents with ASIC 280
216........ When documents are lodged with ASIC......................................... 280
217........ Approved forms for documents to be lodged with ASIC............... 280
218........ ASIC may refuse to receive document etc....................................... 281
Division 3—ASIC’s register of documents 283
219........ Register of documents lodged with ASIC....................................... 283
220........ ASIC may require person to give information for document registers 283
221........ Written document setting out information from document registers is prima facie evidence of matters 284
Division 4—Other provisions relating to documents lodged with ASIC or required under this Act 286
222........ Certified copy or extract of document lodged with ASIC is admissible in evidence 286
223........ ASIC may destroy or dispose of certain documents....................... 286
224........ Court may order lodgment of document etc.................................... 286
225........ Offences relating to documents lodged with ASIC etc.................... 287
Part 5‑3—Concealment or falsification of credit books 290
Division 1—Introduction 290
226........ Guide to this Part............................................................................ 290
Division 2—Prohibitions relating to the concealment or falsification of credit books 291
227........ Concealing etc. of credit books....................................................... 291
228........ Falsification of credit books............................................................ 292
229........ Precautions against falsification of credit books.............................. 293
Part 5‑4—Fees imposed by the National Consumer Credit Protection (Fees) Act 2009 294
Division 1—Introduction 294
230........ Guide to this Part............................................................................ 294
Division 2—Fees imposed by the National Consumer Credit Protection (Fees) Act 2009 295
231........ Fees are payable to the Commonwealth.......................................... 295
232........ Lodgment of document without payment of fee.............................. 295
233........ Doing act without payment of fee................................................... 295
234........ Effect of sections 232 and 233........................................................ 295
235........ Waiver and refund of fees............................................................... 296
236........ Debts due to the Commonwealth.................................................... 296
237........ Payment of fee does not give right to inspect or search................... 296
Part 5‑5—Other administrative matters 297
Division 1—Introduction 297
238........ Guide to this Part............................................................................ 297
Division 2—Other administrative matters 298
239........ ASIC has general administration of this Act................................... 298
240........ Obstructing or hindering ASIC etc................................................. 298
241........ Approved codes of conduct............................................................ 298
242........ ASIC may arrange for use of computer programs to make decisions 299
243........ Qualified privilege for information given to ASIC.......................... 300
244........ ASIC certificate is prima facie evidence of matters......................... 300
245........ Operator of approved external dispute resolution scheme may give information to ASIC 301
Chapter 6—Compliance and enforcement 302
Part 6‑1—Investigations 302
Division 1—Introduction 302
246........ Guide to this Part............................................................................ 302
Division 2—Investigations 303
247........ General powers of investigation...................................................... 303
248........ Minister may direct investigations................................................... 303
249........ Interim report on investigation........................................................ 304
250........ Final report on investigation............................................................ 305
251........ Distribution of report...................................................................... 305
Part 6‑2—Examination of persons 307
Division 1—Introduction 307
252........ Guide to this Part............................................................................ 307
Division 2—Examination of persons 308
253........ Notice requiring appearance for examination.................................. 308
254........ Proceedings at examination............................................................. 308
255........ Requirements made of examinee..................................................... 308
256........ Examination to take place in private................................................ 309
257........ Examinee’s lawyer may attend........................................................ 310
258........ Record of examination.................................................................... 310
259........ Giving to other persons copies of record........................................ 311
260........ Copies given subject to conditions.................................................. 311
261........ Record to accompany report............................................................ 312
Part 6‑3—Inspection of books and audit information‑gathering powers 313
Division 1—Introduction 313
262........ Guide to this Part............................................................................ 313
Division 2—Inspection of books and audit information‑gathering powers 314
263........ When certain powers may be exercised........................................... 314
264........ ASIC may inspect books without charge........................................ 314
265........ Notice to auditors concerning information and books..................... 315
266........ Notice to produce books about credit activities............................... 316
267........ Notice to produce documents in person’s possession..................... 317
268........ ASIC may authorise persons to require production of books, giving of information etc. 317
269........ Application for warrant to seize books not produced...................... 318
270........ Grant of warrant.............................................................................. 318
271........ Powers if books produced or seized............................................... 320
272........ Powers if books not produced........................................................ 321
Part 6‑4—Proceedings after an investigation 322
Division 1—Introduction 322
273........ Guide to this Part............................................................................ 322
Division 2—Proceedings after an investigation 323
274........ ASIC may prosecute....................................................................... 323
275........ ASIC may bring civil proceedings.................................................. 324
Part 6‑5—Hearings 325
Division 1—Introduction 325
276........ Guide to this Part............................................................................ 325
Division 2—Hearings 326
277........ Power to hold hearings................................................................... 326
278........ General discretion to hold hearing in public or private.................... 326
279........ Request by person appearing at hearing that it take place in public. 326
280........ Certain hearings to take place in private.......................................... 327
281........ ASIC may restrict publication of certain material............................ 327
282........ Who may be present when hearing takes place in private................ 328
283........ Involvement of person entitled to appear at hearing........................ 328
284........ Power to summon witnesses and take evidence.............................. 329
285........ Proceedings at hearings................................................................... 330
286........ ASIC to take account of evidence and submissions........................ 331
287........ Reference to court of question of law arising at hearing.................. 331
288........ Protection of ASIC members etc..................................................... 331
Part 6‑6—Offences 333
Division 1—Introduction 333
289........ Guide to this Part............................................................................ 333
Division 2—Offences 334
290........ Contraventions of requirements made under this Chapter............... 334
291........ False information............................................................................ 335
292........ Obstructing person executing a warrant under this Chapter............ 335
293........ Disrupting hearings......................................................................... 336
294........ Concealing books relevant to investigation..................................... 336
295........ Self‑incrimination............................................................................ 337
296........ Legal professional privilege............................................................ 338
297........ Powers of court relating to contraventions of this Chapter.............. 339
Part 6‑7—ASIC’s powers in relation to contraventions of this Chapter 340
Division 1—Introduction 340
298........ Guide to this Part............................................................................ 340
Division 2—ASIC’s powers in relation to contraventions of this Chapter 341
299........ Application of this Part................................................................... 341
300........ Orders by ASIC relating to credit contracts, mortgages, guarantees or consumer leases 341
301........ Orders under this Part..................................................................... 342
Part 6‑8—Evidentiary use of certain material 343
Division 1—Introduction 343
302........ Guide to this Part............................................................................ 343
Division 2—Evidentiary use of certain material 344
303........ Statements made at an examination: proceedings against examinee. 344
304........ Statements made at an examination: other proceedings................... 345
305........ Weight of evidence admitted under section 304.............................. 345
306........ Objection to admission of statements made at examination............. 346
307........ Copies of, or extracts from, certain books....................................... 347
308........ Report under Part 6‑1...................................................................... 348
309........ Exceptions to admissibility of report............................................... 348
310........ Material otherwise admissible......................................................... 349
Part 6‑9—Miscellaneous provisions relating to compliance and enforcement 350
Division 1—Introduction 350
311........ Guide to this Part............................................................................ 350
Division 2—Miscellaneous provisions relating to compliance and enforcement 351
312........ Requirement made of a body corporate........................................... 351
313........ Evidence of authority...................................................................... 351
314........ Giving documents to natural persons.............................................. 351
315........ Place and time for production of books........................................... 352
316........ Application of Crimes Act and Evidence Act.................................. 352
317........ Allowances and expenses............................................................... 352
318........ Expenses of investigation under Part 6‑1........................................ 353
319........ Recovery of expenses of investigation............................................ 353
320........ Compliance with this Chapter......................................................... 354
321........ Effect of this Chapter...................................................................... 354
322........ Enforcement of undertakings.......................................................... 354
Chapter 7—Miscellaneous 356
Part 7‑1—Miscellaneous 356
Division 1—Introduction 356
323........ Guide to this Part............................................................................ 356
Division 2—Liability of persons for conduct of their agents etc. 357
324........ Liability for bodies corporate for conduct of their agents, employees etc. 357
325........ Liability of persons (other than bodies corporate) for the conduct of their agents, employees etc. 358
326........ Regulations for the purposes of this Division................................. 359
Division 3—Review of ASIC’s decisions 360
327........ Review by Administrative Appeals Tribunal of decisions by ASIC under this Act 360
328........ Notice of reviewable decision and review rights............................. 361
Division 4—Regulations 362
329........ Regulations..................................................................................... 362
330........ Regulations—where proceedings may be brought.......................... 362
331........ Regulations—infringement notices................................................. 362
Division 5—Other miscellaneous provisions 364
332........ Civil penalty provisions contravened or offences committed partly in and partly out of this jurisdiction 364
333........ Contravention of Act does not generally affect validity of transactions etc. 364
334........ Contracting out etc.......................................................................... 364
335........ Indemnities...................................................................................... 365
335A..... Review relating to small amount credit contracts............................. 366
336........ Acquisition of property................................................................... 367
337........ Minister may delegate prescribed functions and powers under this Act 367
Schedule 1—National Credit Code 1
Part 1—Preliminary 1
1............ Short title............................................................................................. 1
2............ Interpretation generally........................................................................ 1
3............ Meaning of credit and amount of credit.............................................. 1
4............ Meaning of credit contract.................................................................. 2
5............ Provision of credit to which this Code applies.................................... 2
6............ Provision of credit to which this Code does not apply........................ 3
7............ Mortgages to which this Code applies................................................ 7
8............ Guarantees to which this Code applies................................................ 7
9............ Goods leases with option to purchase to be regarded as sale by instalments 8
10.......... Deciding application of Code to particular contracts for the sale of land by instalments 9
11.......... Deciding application of Code to particular contracts for the sale of goods by instalments 11
12.......... Deciding application of Code to particular contracts for the sale of goods by instalments under related contracts 12
13.......... Presumptions relating to application of Code.................................... 12
13A....... Reverse mortgages............................................................................ 14
Part 2—Credit contracts 15
Division 1—Negotiating and making credit contracts 15
14.......... Credit contract to be in form of written contract document................ 15
15.......... Other forms of contract..................................................................... 15
16.......... Precontractual disclosure................................................................... 16
17.......... Matters that must be in contract document........................................ 17
18.......... Form and expression of contract document....................................... 23
18A....... Provisions that must not be included in credit contract for reverse mortgage 23
18B....... Disclosure if credit contract for reverse mortgage does not protect tenancy of person other than debtor 24
18C....... Independent legal advice before entry into credit contract for reverse mortgage 25
19.......... Alteration of contract document........................................................ 25
20.......... Copy of contract for debtor............................................................... 25
21.......... When debtor may terminate contract................................................. 26
22.......... Offence for noncompliance............................................................... 26
Division 2—Debtor’s monetary obligations 27
23.......... Prohibited monetary obligations—general........................................ 27
23A....... Prohibited monetary obligations—small amount credit contracts...... 27
24.......... Offences related to prohibited monetary obligations—credit providers 28
24A....... Offences related to prohibited monetary obligations—credit assistance providers 29
25.......... Loan to be in money or equivalent.................................................... 29
26.......... Early payments and crediting of payments........................................ 30
26A....... Regulations about residential investment property............................ 31
Division 3—Interest charges 32
27.......... Definitions relating to interest........................................................... 32
27A....... Application of this Division.............................................................. 32
28.......... Limit on interest charges................................................................... 32
29.......... Early debit or payment of interest charges prohibited........................ 33
30.......... Default interest.................................................................................. 33
30A....... Regulations about residential investment property............................ 34
30B....... Regulations about credit card contracts............................................. 34
Division 4—Fees and charges 36
31.......... Prohibited credit fees or charges....................................................... 36
31A....... Restrictions on fees and charges for small amount credit contracts... 36
31B....... Credit provider or prescribed person must not require or accept payment of a fee or charge in relation to a small amount credit contract etc............................................................................... 37
32.......... Fees or charges in relation to third parties......................................... 38
Division 4A—Annual cost rate of certain credit contracts 39
32A....... Prohibitions relating to credit contracts if the annual cost rate exceeds 48% 39
32AA.... Prohibition relating to the annual cost rate of credit contracts—later increases of the annual percentage rate etc. 40
32B....... Calculation of annual cost rate........................................................... 40
Division 5—Credit provider’s obligation to account 44
33.......... Statements of account........................................................................ 44
34.......... Information to be contained in statements of account........................ 45
35.......... Opening balance must not exceed closing balance of previous statement 48
36.......... Statement of amount owing and other matters................................... 48
37.......... Court may order statement to be provided......................................... 49
38.......... Disputed accounts............................................................................. 49
39.......... Dating and adjustment of debits and credits in accounts................... 51
Division 5A—Additional rules relating to small amount credit contracts 52
39A....... Limit on the application of amount of credit provided under a small amount credit contract 52
39B....... Limit on amount that may be recovered if there is default under a small amount credit contract 53
39C....... Credit provider must do prescribed things if a default in payment by direct debit occurs 53
Division 6—Certain transactions not to be treated as new contracts 54
40.......... Changes etc. under contracts............................................................. 54
Part 3—Related mortgages and guarantees 55
Division 1—Mortgages 55
41.......... Application of Division..................................................................... 55
42.......... Form of mortgage............................................................................. 55
43.......... Copy of mortgage for mortgagor...................................................... 55
44.......... Mortgages over all property void...................................................... 56
45.......... Restriction on mortgage of future property....................................... 56
46.......... Mortgages and continuing credit contracts........................................ 56
47.......... All accounts mortgages..................................................................... 57
48.......... Third party mortgages prohibited...................................................... 57
49.......... Maximum amount which may be secured......................................... 58
50.......... Prohibited securities.......................................................................... 58
51.......... Assignment or disposal of mortgaged property by mortgagor.......... 59
52.......... Conditions on consent to assignment or disposal of property subject to mortgage 60
53.......... Offence for noncompliance............................................................... 61
Division 2—Guarantees 62
54.......... Application of Division..................................................................... 62
55.......... Form of guarantee............................................................................. 62
56.......... Disclosure......................................................................................... 62
57.......... Copies of documents for guarantor................................................... 62
58.......... Guarantor may withdraw before credit is provided........................... 63
59.......... Extension of guarantee...................................................................... 63
60.......... Limitation of guarantor’s liability...................................................... 64
61.......... Increase in guarantor’s liabilities....................................................... 65
62.......... Offence for noncompliance............................................................... 65
Part 4—Changes to obligations under credit contracts, mortgages and guarantees 67
Division 1—Unilateral changes by credit provider 67
63.......... Application of Division..................................................................... 67
64.......... Interest rate changes.......................................................................... 67
65.......... Repayment changes........................................................................... 69
66.......... Credit fees and charges changes........................................................ 70
67.......... Changes to credit limits etc. in continuing credit contracts................ 71
67A....... Changes to tenancy protection in credit contracts for reverse mortgages 72
68.......... Other unilateral changes by credit provider....................................... 72
69.......... Particulars of matters as changed only required to be given under this Division in certain cases 73
70.......... Prohibited increases in liabilities....................................................... 73
Division 2—Changes by agreement of parties 74
71.......... Changes by agreement...................................................................... 74
Division 3—Changes on grounds of hardship and unjust transactions 75
72.......... Changes on grounds of hardship...................................................... 75
73.......... Notice of change............................................................................... 77
74.......... Changes by court.............................................................................. 77
75.......... Credit provider may apply for variation of change............................ 78
76.......... Court may reopen unjust transactions............................................... 78
77.......... Orders on reopening of transactions................................................. 81
78.......... Court may review unconscionable interest and other charges........... 82
79.......... Applications by ASIC....................................................................... 83
80.......... Time limit.......................................................................................... 83
81.......... Joinder of parties............................................................................... 84
Part 5—Ending and enforcing credit contracts, mortgages and guarantees 85
Division 1—Ending of credit contract by debtor etc. 85
Subdivision A—Paying out contract etc. 85
82.......... Debtor’s or guarantor’s right to pay out contract.............................. 85
83.......... Statement of pay out figure............................................................... 85
84.......... Court may determine pay out figure if credit provider does not provide a pay out figure 86
85.......... Surrender of mortgaged goods and goods subject to sale by instalments 86
86.......... Compensation to debtor or mortgagor............................................... 89
Subdivision B—Ending of reverse mortgage by credit provider receiving value of reverse mortgaged property 90
86A....... Application of this Subdivision......................................................... 90
86B....... Discharge of debtor’s obligations under credit contract and discharge of mortgage 90
86C....... Credit provider must pay debtor excess of receipt over adjusted market value for reverse mortgaged property 91
86D....... Credit provider must not demand or accept further payments........... 91
86E........ Cases in which sections 86B, 86C and 86D do not apply................. 91
86F........ Relationship between this Subdivision and other provisions............ 92
Subdivision C—Notice of first direct debit default 92
87.......... One‑off notice to be given the first time a direct debit default occurs 92
Division 2—Enforcement of credit contracts, mortgages and guarantees 93
88.......... Requirements to be met before credit provider can enforce credit contract or mortgage against defaulting debtor or mortgagor.......................................................................................... 93
89.......... Defaults may be remedied................................................................. 97
89A....... Effect of hardship notices on enforcement........................................ 97
90.......... Requirements to be met before credit provider can enforce guarantee against guarantor 99
91.......... Requirements to be met before credit provider can repossess mortgaged goods 99
93.......... Requirements to be met before credit provider can enforce an acceleration clause 100
93A....... Extra requirements for enforcing reverse mortgage if debtor’s liability exceeded value of reverse mortgaged property........................................................................................................ 101
Division 3—Postponement of enforcement proceedings 103
94.......... Postponement of exercise of rights................................................. 103
95.......... Effect of negotiated postponement.................................................. 104
96.......... Postponement by court.................................................................... 105
97.......... Credit provider may apply for variation of postponement order...... 105
Division 4—Enforcement procedures for goods mortgaged 107
98.......... Information as to location of mortgaged goods............................... 107
99.......... Entry to residential property to take possession of goods............... 107
100........ Court may order entry..................................................................... 108
101........ Order for possession....................................................................... 108
102........ Procedures to be followed by credit provider after taking possession of goods 109
103........ Mortgagor may nominate purchaser of goods taken by credit provider 110
104........ Sale of goods by credit provider..................................................... 110
105........ Matters for which account can be debited after mortgagee sale of goods 111
106........ Compensation to mortgagor............................................................ 111
Division 5—Enforcement expenses 113
107........ Recovery of enforcement expenses................................................. 113
Division 6—Mortgagor’s remedies 114
108........ Mortgagor may apply to regain possession of mortgaged goods.... 114
109........ Order for possession for mortgagor................................................ 114
110........ Ancillary or consequential orders.................................................... 115
Part 6—Penalties for defaults of credit providers 116
Division 1—Penalties for breach of key disclosure and other requirements 116
111........ Key requirements............................................................................ 116
112........ Application for order relating to key requirements.......................... 117
113........ Penalty may be imposed for contravention of key requirement....... 117
114........ Penalty if application made by debtor or guarantor......................... 119
115........ Payment of penalty to debtor or guarantor...................................... 120
116........ Penalty if application made by a credit provider or ASIC............... 121
117........ Payment of penalty.......................................................................... 121
118........ Compensation for debtor or guarantor............................................ 121
119........ General provisions relating to applications by credit providers or ASIC 122
120........ ASIC may represent interests of debtors......................................... 122
121........ Directions pending court’s decision................................................ 122
122........ Offences.......................................................................................... 123
123........ Time limit for application for orders under this Division................ 123
Division 2—Other penalties 124
124........ Civil effect of contraventions.......................................................... 124
Part 7—Related sale contracts 125
Division 1—Interpretation and application 125
125........ Meaning of sale contract................................................................ 125
126........ Sale contracts to which this Part applies.......................................... 125
127........ Linked credit providers and tied credit contracts............................. 125
Division 2—Liability of credit providers for suppliers’ misrepresentations 127
128........ Credit provider liable with respect to supplier’s misrepresentations etc. about tied credit contract 127
Division 3—Liability of credit providers in relation to goods 128
129........ Right to damages under sale contract against both supplier and linked credit provider 128
130........ Limits on debtor’s right of action against linked credit provider..... 130
131........ Liability of supplier to linked credit provider.................................. 132
132........ Interest may be awarded.................................................................. 132
133........ Subrogation of credit provider........................................................ 132
Division 4—Termination of related transactions 134
134........ Termination of sale contract which is conditional on obtaining credit 134
135........ Termination of (or recredit under) tied credit contract if sale contract terminated 135
136........ Termination of linked maintenance services contract if credit contract terminated 136
137........ Termination of contract under this Part to be in writing.................. 137
138........ Powers of court with respect to termination of contract under this Part 137
139........ Part 5 not to apply to termination of contract under this Part........... 137
Division 5—Other provisions 138
140........ Requirement as to source of credit for goods or services................ 138
141........ Prohibition on payment for goods or services by postdated bills of exchange or notes which exceed cash price of goods or services....................................................................................... 138
Part 8—Related insurance contracts 139
142........ Interpretation and application.......................................................... 139
143........ Requirement to take out insurance or to insure with particular insurer or on particular terms 139
144........ Financing of insurance premiums over mortgaged property........... 140
145........ Commission for consumer credit insurance.................................... 141
146........ Supply of copy of credit‑related insurance contract by insurer........ 142
147........ Rejection of debtor’s proposal for insurance................................... 142
148........ Termination of consumer credit insurance contract if credit contract terminated 143
149........ Termination of insurance contract over mortgaged property if credit contract terminated 143
Part 9—Advertising and related conduct 145
150........ Advertising..................................................................................... 145
151........ Persons liable for advertisements.................................................... 146
152........ Defence........................................................................................... 146
153........ Interest rates which may be disclosed............................................. 146
154........ False or misleading representations................................................. 147
155........ Harassment..................................................................................... 147
156........ Canvassing of credit at home.......................................................... 147
Part 10—Comparison rates 149
Division 1—Preliminary 149
157........ Object of Part.................................................................................. 149
158........ Part not to apply to continuing credit contracts................................ 149
159........ Definitions...................................................................................... 149
Division 2—Comparison rate in credit advertising 151
160........ Comparison rate mandatory in advertisements containing annual percentage rate 151
161........ The relevant comparison rate........................................................... 151
162........ Information about comparison rate.................................................. 151
163........ Warning about comparison rate....................................................... 152
164........ Other requirements for comparison rate.......................................... 152
Division 3—Comparison rate in other documents 154
165........ Comparison rates in documents other than credit advertising.......... 154
Division 4—Miscellaneous 155
166........ Calculation of comparison rates...................................................... 155
167........ Compliance grace period following changes in interest or fees....... 155
168........ Regulations—exemptions and other matters................................... 155
Part 11—Consumer leases 156
Division 1—Interpretation and application 156
169........ Meaning of consumer lease............................................................ 156
170........ Consumer leases to which this Part applies..................................... 156
171........ Consumer leases to which this Part does not apply......................... 157
172........ Presumptions relating to application of this Part............................. 158
Division 2—Form of and information to be included in consumer leases 160
173........ Form of consumer lease.................................................................. 160
173A..... Other forms of consumer lease....................................................... 160
174........ Disclosures in consumer leases....................................................... 161
174A..... Alteration of consumer lease document........................................... 162
175........ Copy of lease etc. for lessee............................................................ 162
Division 4—Fees and charges 163
175A..... Prohibited consumer lease fees or charges...................................... 163
175B..... Fees or charges in relation to third parties....................................... 163
Division 5—Lessor’s obligation to account 165
Subdivision A—Ongoing statements of account 165
175C..... Statements of account...................................................................... 165
175D..... Information to be contained in statements of account...................... 165
175E...... Statement of amount owing and other matters................................. 165
175F...... Court may order statement of account to be provided..................... 166
175G..... Disputed accounts........................................................................... 166
Subdivision B—End of lease statements 168
175H..... End of lease statement..................................................................... 168
Division 6—Certain transactions not to be treated as new consumer leases 169
175J...... Changes etc. under consumer leases............................................... 169
Division 7—Changes to obligations under consumer leases 170
Subdivision A—Changes by agreement of parties 170
177A..... Changes by agreement.................................................................... 170
Subdivision B—Changes on grounds of hardship and unjust transactions 171
177B..... Changes on grounds of hardship.................................................... 171
177C..... Notice of change............................................................................. 173
177D..... Changes by court............................................................................ 173
177E...... Lessor may apply for variation of change....................................... 174
177F...... Court may reopen unjust transactions............................................. 174
177G..... Orders on reopening of transactions............................................... 176
177H..... Applications by ASIC..................................................................... 177
177J...... Time limit........................................................................................ 177
177K..... Joinder of parties............................................................................. 178
Division 8—Repossession, termination and enforcement of consumer leases 179
Subdivision A—Repossession of goods under consumer lease 179
178........ Notice of repossession.................................................................... 179
Subdivision B—Termination of consumer lease by lessee 179
178A..... Termination before goods have been provided................................ 179
179........ Termination after goods have been provided................................... 180
179A..... Statement of amount payable on termination................................... 180
179B..... Court may determine amount payable on termination if lessor does not 181
179C..... One‑off notice to be given the first time a direct debit default occurs 181
Subdivision C—Enforcement of consumer leases 182
179D..... Requirements to be met before lessor can enforce consumer lease against defaulting lessee 182
179E...... Defaults may be remedied............................................................... 184
179F...... Effect of hardship notices on enforcement...................................... 185
179G..... Requirements to be met before lessor can enforce an acceleration clause 186
Subdivision D—Postponement of enforcement proceedings 187
179H..... Postponement of exercise of rights................................................. 187
179J...... Effect of negotiated postponement.................................................. 188
179K..... Postponement by court.................................................................... 189
179L...... Lessor may apply for variation of postponement order................... 189
Subdivision E—Enforcement procedures for goods hired under a consumer lease 190
179M.... Information as to location of goods hired under a consumer lease.. 190
179N..... Entry to residential property to take possession of goods............... 190
179P...... Court may order entry..................................................................... 191
179Q..... Order for possession....................................................................... 191
Subdivision F—Enforcement expenses 191
179R..... Recovery of enforcement expenses................................................. 191
Division 9—Linked lessors and tied consumer leases 193
Subdivision A—Interpretation and application 193
179S...... Linked lessors and tied consumer leases......................................... 193
Subdivision B—Liability of lessors for suppliers’ misrepresentations 194
179T...... Lessor liable for supplier’s misrepresentations about hired goods.. 194
Division 10—Conduct relating to consumer leases 195
179U..... False or misleading representations................................................. 195
179V..... Harassment..................................................................................... 195
Division 11—Other Code provisions applicable to consumer leases 196
179W.... Application of certain Code provisions to consumer leases............ 196
Part 12—Miscellaneous 197
Division 1—Tolerances and assumptions 197
180........ Tolerances and assumptions relating to information........................ 197
181........ Tolerances relating to contracts and other documents...................... 198
182........ Regulations..................................................................................... 199
Division 2—Documentary provisions 200
183........ Form of notices............................................................................... 200
184........ Legibility and language................................................................... 200
185........ Copies of contracts and other documents........................................ 201
185A..... Records of nominations of persons to occupy reverse mortgaged properties 202
186........ Signing of documents..................................................................... 202
187........ Electronic transactions and documents............................................ 202
Division 3—General provisions 204
188........ Assignment by credit provider........................................................ 204
189........ Assignment by debtor, mortgagor or guarantor.............................. 204
190........ Appropriation of payments............................................................. 204
191........ Contracting out................................................................................ 205
192........ Indemnities...................................................................................... 205
193........ Effect of noncompliance.................................................................. 206
194........ Giving notice or other document..................................................... 206
195........ Manner of giving notice or other document.................................... 208
196........ Date of notice or other document.................................................... 209
197........ Extensions of time........................................................................... 210
198........ Orders of court................................................................................ 210
199........ Conduct of agents and related matters............................................. 210
Division 4—Provisions relating to offences 211
200........ Offences by officers, agents or employees...................................... 211
201........ Offences by corporations................................................................ 211
202........ Limitations...................................................................................... 211
203........ Application of section 4K of the Crimes Act 1914.......................... 212
Division 5—Exemptions from this Code 213
203A..... Exemptions by ASIC...................................................................... 213
203B..... Exemptions by the regulations........................................................ 213
Part 13—Principal definitions 214
204........ Principal definitions........................................................................ 214
Part 14—Miscellaneous provisions relating to interpretation 228
Division 1—Preliminary 228
205........ Displacement of Part by contrary intention..................................... 228
Division 2—General 229
207........ References to particular Acts and to enactments.............................. 229
208........ Compliance with forms................................................................... 229
Division 3—Terms and references 230
209........ Provisions relating to defined terms and gender and number.......... 230
210........ Meaning of may and must etc......................................................... 230
211........ Effect of express references to bodies corporate and individuals.... 230
212........ Reference to certain provisions of Code.......................................... 231
213........ Reference to provisions of this Code or an Act is inclusive............ 231
Division 4—Functions and powers 233
214........ Power to make instrument or decision includes power to amend or repeal 233
215........ Matters for which statutory instruments may make provision......... 233
216........ Presumption of validity and power to make.................................... 234
217........ Exercise of powers between enactment and commencement........... 235
Division 5—Distance, time and age 238
218........ Matters relating to distance, time and age........................................ 238
Endnotes 239
Endnote 1—About the endnotes 239
Endnote 2—Abbreviation key 241
Endnote 3—Legislation history 242
Endnote 4—Amendment history 244
Endnote 5—Uncommenced amendments [none] 256
Endnote 6—Modifications [none] 256
Endnote 7—Misdescribed amendments [none] 256
Endnote 8—Miscellaneous [none] 256
An Act relating to credit, and for related purposes
Chapter 1—Introduction
Part 1‑1—Introduction
1 Short title
This Act may be cited as the National Consumer Credit Protection Act 2009.
2 Commencement
(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
| Commencement information |
| Column 1 | Column 2 | Column 3 |
| Provision(s) | Commencement | Date/Details |
| 1. Sections 1 and 2 and anything in this Act not elsewhere covered by this table | The day on which this Act receives the Royal Assent. | 15 December 2009 |
| 2. Sections 3 to 337 and Schedule 1 | A single day to be fixed by Proclamation. However, if any of the provision(s) do not commence within the period of 6 months beginning on the day on which this Act receives the Royal Assent, they commence on the first day after the end of that period. | 1 April 2010 (see F2010L00301) |
Note: This table relates only to the provisions of this Act as originally passed by both Houses of the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent.
(2) Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act.
3 The National Credit Code
Schedule 1 (which is the National Credit Code) has effect as a law of the Commonwealth.
Part 1‑2—Definitions
Division 1—Introduction
4 Guide to this Part
This Part is about the terms that are defined in this Act (other than the National Credit Code). (For the terms that are defined in the National Credit Code, see section 204 of that Code.)
Division 2 has the Dictionary (see section 5). The Dictionary is a list of every term that is defined in this Act (other than the National Credit Code). A term will either be defined in the Dictionary itself, or in another provision of this Act. If another provision defines the term, the Dictionary will have a signpost to that definition.
Division 3 has definitions relating to the meaning of credit activity.
Division 4 has some other definitions that apply across this Act (other than the National Credit Code).
Division 2—The Dictionary
5 The Dictionary
(1) In this Act (other than the National Credit Code):
acts as an intermediary: see section 9.
ADI has the same meaning as in subsection 5(1) of the Banking Act 1959.
adverse publicity order: see section 182.
affairs, in relation to a person that is a body corporate, has the same meaning as in Part 3 of the ASIC Act.
affidavit includes affirmation.
ancillary offence, in relation to another offence, means:
(a) an offence against section 6 of the Crimes Act 1914; or
(b) an ancillary offence within the meaning of the Criminal Code;
that relates to the other offence.
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 Circuit Court means the Federal Circuit Court of Australia.
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 has the same meaning as in section 204 of the National Credit Code, and includes a person who is a lessor because of section 10.
licence means an Australian credit licence.
licensee means a person who holds a licence.
licensing anniversary: see subsection 53(7).
linked: for when a credit card is linked to a credit card contract, see subsection 133BA(3).
lodge with ASIC: see section 216.
lower court means:
(a) the Federal Circuit 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 Circuit 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.
short‑term credit contract: a credit contract is a short‑term credit contract if:
(a) the contract is not a continuing credit contract; and
(b) the credit provider under the contract is not an ADI; and
(c) the credit limit of the contract is $2,000 (or such other amount as is prescribed by the regulations) or less; and
(d) the term of the contract is 15 days or less; and
(e) the contract meets any other requirements prescribed by the regulations.
small amount credit contract: a credit contract is a small amount credit contract if:
(a) the contract is not a continuing credit contract; and
(b) the credit provider under the contract is not an ADI; and
(c) the credit limit of the contract is $2,000 (or such other amount as is prescribed by the regulations) or less; and
(d) the term of the contract is at least 16 days but not longer than 1 year (or such other number of years as is prescribed by the regulations); and
(e) the debtor’s obligations under the contract are not, and will not be, secured; and
(f) the contract meets any other requirements prescribed by the regulations.
standard home loan: see subsection 133AA(1).
State, when used in a geographical sense, includes the coastal sea of the State.
statement, when used in Chapter 6 (which deals with compliance and enforcement) in relation to an examination, includes a question asked, an answer given, and any other comment or remark made, at the examination.
state of mind: the state of mind of a person includes:
(a) the knowledge, intention, opinion, belief or purpose of the person; and
(b) the person’s reasons for the intention, opinion, belief or purpose.
State or Territory credit licence means a licence or registration that:
(a) is granted under a law of a State or Territory; and
(b) authorises the licensee or registered person to engage in a credit activity.
strata corporation has the same meaning as in section 204 of the National Credit Code.
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 3—Definitions relating to the meaning of credit activity
6 Meaning of credit activity
(1) The following table sets out when a person engages in a credit activity.
| Meaning of credit activity |
| Item | Topic | A person engages in a credit activity if: |
| 1 | credit contracts | (a) the person is a credit provider under a credit contract; or (b) the person carries on a business of providing credit, being credit the provision of which the National Credit Code applies to; or (c) the person performs the obligations, or exercises the rights, of a credit provider in relation to a credit contract or proposed credit contract (whether the person does so as the credit provider or on behalf of the credit provider); or |
| 2 | credit service | the person provides a credit service; or |
| 3 | consumer leases | (a) the person is a lessor under a consumer lease; or (b) the person carries on a business of providing consumer leases; or (c) the person performs the obligations, or exercises the rights, of a lessor in relation to a consumer lease or proposed consumer lease (whether the person does so as the lessor or on behalf of the lessor); or |
| 4 | mortgages | (a) the person is a mortgagee under a mortgage; or (b) the person performs the obligations, or exercises the rights, of a mortgagee in relation to a mortgage or proposed mortgage (whether the person does so as the mortgagee or on behalf of the mortgagee); or |
| 5 | guarantees | (a) the person is the beneficiary of a guarantee; or (b) the person performs the obligations, or exercises the rights, of another person who is a beneficiary of a guarantee or proposed guarantee, in relation to the guarantee or proposed guarantee (whether the person does so on the person’s own behalf or on behalf of the other person); or |
| 6 | prescribed activities | the person engages in an activity prescribed by the regulations in relation to credit, being credit the provision of which the National Credit Code applies to, or would apply to if the credit were provided. |
(2) A subclass of any of the conduct referred to in the table in subsection (1) is also a credit activity.
Note: For example, ASIC could impose a condition on a licence under subsection 45(6) that provides that a person is authorised to be a credit provider only under particular types of credit contracts (such as credit card contracts).
7 Meaning of credit service
A person provides a credit service if the person:
(a) provides credit assistance to a consumer; or
(b) acts as an intermediary.
8 Meaning of credit assistance
A person provides credit assistance to a consumer if, by dealing directly with the consumer or the consumer’s agent in the course of, as part of, or incidentally to, a business carried on in this jurisdiction by the person or another person, the person:
(a) suggests that the consumer apply for a particular credit contract with a particular credit provider; or
(b) suggests that the consumer apply for an increase to the credit limit of a particular credit contract with a particular credit provider; or
(c) suggests that the consumer remain in a particular credit contract with a particular credit provider; or
(d) assists the consumer to apply for a particular credit contract with a particular credit provider; or
(e) assists the consumer to apply for an increase to the credit limit of a particular credit contract with a particular credit provider; or
(f) suggests that the consumer apply for a particular consumer lease with a particular lessor; or
(g) suggests that the consumer remain in a particular consumer lease with a particular lessor; or
(h) assists the consumer to apply for a particular consumer lease with a particular lessor.
It does not matter whether the person does so on the person’s own behalf or on behalf of another person.
9 Meaning of acts as an intermediary
A person acts as an intermediary if, in the course of, as part of, or incidentally to, a business carried on in this jurisdiction by the person or another person, the person:
(a) acts as an intermediary (whether directly or indirectly) between a credit provider and a consumer wholly or partly for the purposes of securing a provision of credit for the consumer under a credit contract for the consumer with the credit provider; or
(b) acts as an intermediary (whether directly or indirectly) between a lessor and a consumer wholly or partly for the purposes of securing a consumer lease for the consumer with the lessor.
It does not matter whether the person does so on the person’s own behalf or on behalf of another person.
10 Assignees of credit providers, lessors, mortgagees and beneficiaries of a guarantee
(1) For the purposes of this Act (other than the National Credit Code), a person is a credit provider, lessor, mortgagee or beneficiary of a guarantee whether the person is:
(a) the original credit provider, lessor, mortgagee or beneficiary of a guarantee under a credit contract, consumer lease, mortgage or guarantee; or
(b) a person to whom the rights of a credit provider, lessor, mortgagee or beneficiary of a guarantee under a credit contract, consumer lease, mortgage or guarantee have been assigned or passed by law.
Note: For example, a person who is assigned the rights of a credit provider under a credit contract would engage in a credit activity within the meaning of paragraph (a) of item 1 of the table in subsection 6(1).
(2) For the purposes of paragraph (1)(b), it does not matter whether an assignment or passing by law of rights is the first or a subsequent assignment or passing by law of those rights.
Division 4—Other definitions
11 Meaning of approved external dispute resolution scheme
(1) A person is a member of an approved external dispute resolution scheme if the person is a member of one or more external dispute resolution schemes that:
(a) is, or are, approved by ASIC in accordance with the regulations; and
(b) covers, or together cover, disputes in relation to the credit activities engaged in by the person or its representatives.
(2) Regulations made for the purpose of paragraph (1)(a) may also deal with the variation or revocation of approvals given by ASIC.
12 When a business is carried on in this jurisdiction
(1) Division 3 of Part 1.2 of the Corporations Act 2001 applies for the purposes of working out whether a business is carried on in this jurisdiction.
(2) Without limiting subsection (1), a business is taken to be carried on in this jurisdiction by a person if, in the course of carrying on the business, the person engages in conduct that is:
(a) intended to induce people in this jurisdiction to use the goods or services the person provides; or
(b) is likely to have that effect;
whether or not the conduct is intended, or likely, to have that effect in other places as well.
13 Meaning of misleading
(1) A representation made by a person is misleading if:
(a) the representation relates to a future matter (including the doing of, or refusing to do, any act); and
(b) the person does not have reasonable grounds for making the representation.
(2) Subsection (1) does not limit the circumstances in which a representation may be misleading.
14 Meaning of person—generally includes a partnership
(1) This Act (other than the National Credit Code) applies to a partnership as if the partnership were a person, but it applies with the following changes:
(a) obligations that would be imposed on the partnership are imposed instead on each partner, but may be discharged by any of the partners;
(b) any contravention of this Act (other than the National Credit Code) that would otherwise be a contravention by the partnership is taken (whether for the purposes of criminal or civil liability) to have been a contravention by each partner who:
(i) aided, abetted, counselled or procured the relevant act or omission; or
(ii) was in any way knowingly concerned in, or party to, the relevant act or omission (whether directly or indirectly and whether by any act or omission of the partner).
Note: For the purposes of paragraph (b), to determine whether the partnership has contravened this Act, see section 325.
(2) For the purposes of this Act (other than the National Credit Code), a change in the composition of a partnership does not affect the continuity of the partnership.
(3) Subsections (1) and (2) have effect subject to:
(a) an express or implied contrary intention in a provision of this Act (other than the National Credit Code); and
(b) the regulations, which may exclude or modify the effect of those subsections in relation to specified provisions.
15 Meaning of person—generally includes multiple trustees
(1) This section applies in relation to a trust during a period while the trust continues to have:
(a) 2 or more trustees; or
(b) a single trustee who was a trustee of the trust at a time when it had 2 or more trustees.
(2) Subject to subsections (3) and (4), during the period this Act (other than the National Credit Code) applies to the trust as if the trustee or trustees of the trust from time to time during the period were a single person (the notional person) that remained the same for the duration of that period.
Note: So, for example, a licence granted under this Act during the period to the trustees of the trust will continue in force, despite a change in the persons who are the trustees.
(3) If, during the period or any part of the period, the trust has 2 or more trustees, this Act (other than the National Credit Code) applies to the trustees as referred to in subsection (2), but it applies with the following changes:
(a) obligations that would be imposed on the notional person are imposed instead on each trustee, but may be discharged by any of the trustees;
(b) any contravention of this Act (other than the National Credit Code) that would otherwise be a contravention by the notional person is taken (whether for the purposes of criminal or civil liability) to have been a contravention by each trustee who:
(i) aided, abetted, counselled or procured the relevant act or omission; or
(ii) was in any way knowingly concerned in, or party to, the relevant act or omission (whether directly or indirectly and whether by any act or omission of the trustee).
Note: For the purposes of paragraph (b), to determine whether the notional person has contravened this Act, see section 325.
(4) If, during the period or any part of the period, the trust has only one trustee, this Act (other than the National Credit Code) applies to the trustee as referred to in subsection (2), but it applies with the following changes:
(a) obligations that would be imposed on the notional person are imposed instead on that single trustee;
(b) any contravention of this Act (other than the National Credit Code) that would otherwise be a contravention by the notional person is taken (whether for the purposes of criminal or civil liability) to have been a contravention by that single trustee.
(5) Subsections (2), (3) and (4) have effect subject to:
(a) an express or implied contrary intention in a provision of this Act (other than the National Credit Code); and
(b) the regulations, which may exclude or modify the effect of those subsections in relation to specified provisions.
16 Qualified privilege
(1) If this Act provides that a person has qualified privilege in relation to an act, matter or thing, then the person:
(a) has qualified privilege in proceedings for defamation; or
(b) is not, in the absence of malice on the person’s part, liable to an action for defamation at the suit of a person;
in relation to that act, matter or thing.
(2) Malice includes ill will to the person concerned or any other improper motive.
(3) Neither this section nor a provision of this Act that provides as referred to in subsection (1) limits or affects any right, privilege or immunity that a person has, apart from this section or such a provision, as defendant in proceedings, or an action, for defamation.
Part 1‑3—Application of this Act and the Transitional Act
Division 1—Introduction
17 Guide to this Part
This Part deals with the application of this Act and the Transitional Act.
Division 2 is about the constitutional basis and geographical application of those Acts. It also deals with the application of those Acts to the Crown.
Division 3 deals with the interaction between those Acts and laws of the States and Territories.
Division 2—Constitutional basis and application of this Act and the Transitional Act
18 Constitutional basis for this Act and the Transitional Act
Application in a referring State
(1) The application of this Act and the Transitional Act in the referring States is based on:
(a) the legislative powers that the Commonwealth Parliament has under section 51 of the Constitution (other than paragraph 51(xxxvii)); and
(b) the legislative powers that the Commonwealth Parliament has because of a reference or an adoption by the Parliaments of the referring States under paragraph 51(xxxvii) of the Constitution.
Application in a Territory
(2) The application of this Act and the Transitional Act in a Territory is based on:
(a) the legislative powers that the Commonwealth Parliament has under section 122 of the Constitution to make laws for the government of a Territory; and
(b) the legislative powers that the Commonwealth Parliament has under section 51 of the Constitution.
Despite 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 3—Interaction between the Commonwealth credit legislation and State and Territory laws
23 Concurrent operation intended
(1) This Act and the Transitional Act (the Commonwealth credit legislation) are not intended to exclude or limit the concurrent operation of any law of a State or Territory.
(2) If:
(a) an act or omission of a person is both an offence against the Commonwealth credit legislation and an offence against the law of a State or Territory; and
(b) the person is convicted of either of those offences;
the person is not liable to be convicted of the other of those offences.
(3) This section does not apply to a law of a State or Territory if there is a direct inconsistency between that law and the Commonwealth credit legislation.
Note: Section 25 avoids direct inconsistency arising in some cases by limiting the operation of the Commonwealth credit legislation.
24 When Commonwealth credit legislation does not apply
(1) Subsection (2) applies if a provision of a law of a referring State or a Territory declares a matter to be an excluded matter for the purposes of this section in relation to:
(a) the whole of the Commonwealth credit legislation; or
(b) a specified provision of the Commonwealth credit legislation; or
(c) the Commonwealth credit legislation other than a specified provision; or
(d) the Commonwealth credit legislation otherwise than to a specified extent.
(2) By force of this subsection:
(a) none of the provisions of the Commonwealth credit legislation (other than this section) applies in or in relation to the State or Territory with respect to the matter if the declaration is one to which paragraph (1)(a) applies; and
(b) the specified provision of the Commonwealth credit legislation does not apply in or in relation to the State or Territory with respect to the matter if the declaration is one to which paragraph (1)(b) applies; and
(c) the provisions of the Commonwealth credit legislation (other than this section and the specified provisions) do not apply in or in relation to the State or Territory with respect to the matter if the declaration is one to which paragraph (1)(c) applies; and
(d) the provisions of the Commonwealth credit legislation (other than this section and otherwise than to the specified extent) do not apply in or in relation to the State or Territory with respect to the matter if the declaration is one to which paragraph (1)(d) applies.
(3) Subsection (2) does not apply to the declaration to the extent to which the regulations provide that that subsection does not apply to that declaration.
25 Avoiding direct inconsistency between Commonwealth and State and Territory laws
This section overrides other Commonwealth credit legislation
(1) This section has effect despite anything else in the Commonwealth credit legislation.
When this section does not apply to a State or Territory law
(2) This section does not apply to a provision of a law of a referring State or a Territory that is capable of concurrent operation with the Commonwealth credit legislation.
Note: This kind of provision is dealt with by section 23.
When this section applies to a State or Territory law
(3) This section applies to the interaction between a provision (the displacement provision) of a law of a referring State or a Territory and a provision (the Commonwealth provision) of the Commonwealth credit legislation only if the displacement provision is declared by a law of the State or Territory to be a Commonwealth credit legislation displacement provision for the purposes of this section (either generally or specifically in relation to the Commonwealth provision).
Effect of displacement provision
(4) The Commonwealth provision does not:
(a) prohibit the doing of an act; or
(b) impose a liability (whether civil or criminal) for doing an act;
if the displacement provision specifically permits, authorises or requires the doing of that act.
(5) The Commonwealth provision does not operate in or in relation to the State or Territory to the extent necessary to ensure that no inconsistency arises between:
(a) the Commonwealth provision; and
(b) the displacement provision to the extent to which the displacement provision would, apart from this subsection, be inconsistent with the Commonwealth provision.
Note 1: The displacement provision is not covered by this subsection if subsection (4) applies to the displacement provision: if that subsection applies there would be no potential inconsistency to be dealt with by this subsection.
Note 2: The operation of the displacement provision will be supported by section 23 to the extent to which it can operate concurrently with the Commonwealth provision.
(6) Subsections (4) and (5) do not apply in relation to the displacement provision to the extent to which the regulations provide that those subsections do not apply in relation to the displacement provision.
26 Regulations to deal with interaction between laws
(1) The regulations may modify the operation of the Commonwealth credit legislation so that:
(a) provisions of the Commonwealth credit legislation do not apply to a matter that is dealt with by a law of a referring State or a Territory specified in the regulations; or
(b) no inconsistency arises between the operation of a provision of the Commonwealth credit legislation and the operation of a provision of a law of a referring State or a Territory specified in the regulations.
(2) Without limiting subsection (1), regulations made for the purposes of that subsection may provide that a provision of the Commonwealth credit legislation:
(a) does not apply to:
(i) a person specified in the regulations; or
(ii) a body specified in the regulations; or
(iii) circumstances specified in the regulations; or
(iv) a person or body specified in the regulations in the circumstances specified in the regulations; or
(b) does not prohibit an act to the extent to which the prohibition would otherwise give rise to an inconsistency with a law of a referring State or a Territory; or
(c) does not require a person to do an act to the extent to which the requirement would otherwise give rise to an inconsistency with a law of a referring State or a Territory; or
(d) does not authorise a person to do an act to the extent to which the conferral of that authority on the person would otherwise give rise to an inconsistency with a law of a referring State or a Territory; or
(e) does not impose an obligation on a person to the extent to which complying with that obligation would require the person not to comply with an obligation imposed on the person under a law of a referring State or a Territory; or
(f) authorises a person to do something for the purposes of the Commonwealth credit legislation that the person:
(i) is authorised to do under a law of a referring State or a Territory; and
(ii) would not otherwise be authorised to do under the Commonwealth credit legislation; or
(g) will be taken to be satisfied if a law of a referring State or a Territory is satisfied.
Chapter 2—Licensing of persons who engage in credit activities
Part 2‑1—Requirement to be licensed to engage in credit activities
Division 1—Introduction
27 Guide to this Part
This Part is about the licensing of persons to engage in credit activities. In general, a person cannot engage in a credit activity if the person does not hold an Australian credit licence.
Division 2 prohibits a person from engaging in credit activities without an Australian credit licence. However, the prohibition does not apply to employees and directors of licensees or related bodies corporate of licensees, or to credit representatives of licensees.
Division 3 deals with other prohibitions relating to the requirement to be licensed and to credit activities. These prohibitions relate to holding out and advertising, conducting business with unlicensed persons, and charging fees for unlicensed conduct.
Division 2—Engaging in credit activities without a licence
28 Application of this Division
This Division applies on or after 1 July 2011, or a later day prescribed by the regulations.
29 Prohibition on engaging in credit activities without a licence
Prohibition on engaging in credit activities without a licence
(1) A person must not engage in a credit activity if the person does not hold a licence authorising the person to engage in the credit activity.
Civil penalty: 2,000 penalty units.
Offence
(2) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 200 penalty units, or 2 years imprisonment, or both.
Defences
(3) For the purposes of subsections (1) and (2), it is a defence if:
(a) the person engages in the credit activity on behalf of another person (the principal); and
(b) the person is:
(i) an employee or director of the principal or of a related body corporate of the principal; or
(ii) a credit representative of the principal; and
(c) the person’s conduct in engaging in the credit activity is within the authority of the principal; and
(d) the principal holds a licence authorising the principal to engage in the credit activity.
Note: For the purposes of subsection (2), a defendant bears an evidential burden in relation to the matter in subsection (3) (see subsection 13.3(3) of the Criminal Code).
(4) For the purposes of subsections (1) and (2), it is a defence if:
(a) the person engages in the credit activity on behalf of another person (the principal); and
(b) the person is a representative of the principal; and
(c) the person’s conduct in engaging in the credit activity is within the authority of the principal; and
(d) the principal is exempted from subsections (1) and (2) under paragraph 109(1)(a), 109(3)(a) or 110(a).
Note: For the purposes of subsection (2), a defendant bears an evidential burden in relation to the matter in subsection (4) (see subsection 13.3(3) of the Criminal Code).
Division 3—Other prohibitions relating to the requirement to be licensed
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.
Part 2‑2—Australian credit licences
Division 1—Introduction
34 Guide to this Part
This Part is about Australian credit licences.
Division 2 explains what an Australian credit licence is and the credit activities that are authorised by it.
Division 3 is about how to get an Australian credit licence, including how to apply for it and when ASIC may grant or refuse to grant it.
Division 4 is about the conditions that may be imposed on an Australian credit licence.
Division 5 is about conduct obligations of licensees.
Division 6 is about the suspension, cancellation or variation of an Australian credit licence.
Division 2—Australian credit licences
35 Australian credit licences
(1) An Australian credit licence is a licence that authorises the licensee to engage in particular credit activities.
(2) The credit activities that the licensee is authorised to engage in are those credit activities specified in a condition of the licence as the credit activities that the licensee is authorised to engage in.
Division 3—How to get an Australian credit licence
36 Applying for a licence
(1) A person may apply for a licence by lodging an application with ASIC on or after 1 July 2010, or a later day prescribed by the regulations.
(2) The application must be in the approved form.
37 When a licence may be granted—applicants other than ADIs
When ASIC must grant a licence
(1) ASIC must grant a person (other than an ADI) a licence if (and must not grant the person a licence unless):
(a) the person has applied for the licence in accordance with section 36; and
(b) ASIC has no reason to believe that the person is likely to contravene the obligations that will apply under section 47 if the licence is granted; and
(c) ASIC has no reason to believe that the person is not a fit and proper person to engage in credit activities; and
(d) the person has given ASIC any additional information or audit report requested by ASIC under subsection (4); and
(e) the person meets any other requirements prescribed by the regulations.
Note: ASIC must not grant a licence to a person contrary to a banning order or disqualification order, or if a prescribed State or Territory order is in force against the person or certain representatives of the person (see section 40).
Matters ASIC must have regard to
(2) For the purposes of paragraphs (1)(b) and (c), ASIC must (subject to Part VIIC of the Crimes Act 1914) have regard to the following:
(a) whether a registration under the Transitional Act, a licence or an Australian financial services licence of the person has ever been suspended or cancelled;
(b) whether a banning order or disqualification order under Part 2‑4 has ever been made against the person;
(c) whether a banning order or disqualification order under Division 8 of Part 7.6 of the Corporations Act 2001 has ever been made against the person;
(d) whether the person has ever been banned from engaging in a credit activity under a law of a State or Territory;
(e) any relevant information given to ASIC by a State or Territory, or an authority of a State or Territory, in relation to the person;
(f) if the person is not the trustees of a trust—whether the person has ever been insolvent;
(g) if the person is a single natural person:
(i) whether the person has ever been disqualified from managing corporations under Part 2D.6 of the Corporations Act 2001; and
(ii) any criminal conviction of the person, within 10 years before the application was made;
(h) if the person is not a single natural person, whether ASIC has reason to believe that any of the following persons is not a fit and proper person to engage in credit activities:
(i) if the person is a body corporate—each director, secretary or senior manager of the body corporate who would perform duties in relation to the credit activities to be authorised by the licence;
(ii) if the person is a partnership or the trustees of a trust—each partner or trustee who would perform duties in relation to the credit activities to be authorised by the licence;
(i) any other matter ASIC considers relevant;
(j) any other matter prescribed by the regulations.
Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them.
(3) ASIC must (subject to Part VIIC of the Crimes Act 1914), in considering whether it has reason to believe that a person referred to in paragraph (2)(h) is not a fit and proper person to engage in credit activities, have regard to:
(a) the matters set out in paragraphs (2)(a) to (g); and
(b) any other matter ASIC considers relevant; and
(c) any other matter prescribed by the regulations;
in relation to that person.
ASIC may request information or audit report from applicant
(4) ASIC may give a written notice to a person who has applied for a licence requesting the person to lodge with ASIC, within the time specified in the notice, either or both of the following:
(a) additional information specified in the notice in relation to any matters that ASIC may have regard to in deciding whether to grant the licence;
(b) an audit report, prepared by a suitably qualified person specified in the notice, in relation to matters that ASIC may have regard to in deciding whether to grant the licence.
(5) If the person does not lodge with ASIC the additional information or audit report requested by ASIC under subsection (4) within the time specified in the notice, the person is taken to have withdrawn the application. ASIC may extend the time by giving a written notice to the person.
38 When a licence may be granted—ADIs
If:
(a) an ADI applies under section 36 for a licence; and
(b) the application includes a statement (in accordance with the requirements of the approved form) to the effect that the ADI will, if granted the licence, comply with its obligations as a licensee;
then ASIC must grant the ADI a licence authorising the ADI to engage in credit activities that equate (as closely as possible) to the credit activities in relation to which the application was made.
Note: ASIC must not grant a licence to a person contrary to a banning order or disqualification order, or if a prescribed State or Territory order is in force against the person or certain representatives of the person (see section 40).
39 Regulations may prescribe streamlined process for other applicants
Despite sections 36 and 37, the regulations may provide that:
(a) some or all of sections 36 and 37 do not apply in relation to particular classes of applicants; and
(b) alternative processes apply to applications for licences by, and the grant of licences to, those classes of applicants.
40 Licences must not be granted to certain applicants
Banning or disqualification order in force against person
(1) Despite subsection 37(1) and section 38, ASIC must not grant a licence that authorises a person to engage in a credit activity if a banning order or disqualification order under Part 2‑4 is in force against the person in relation to that credit activity.
Prescribed State or Territory order in force against person etc.
(2) Despite subsection 37(1) and section 38, ASIC must not grant a licence to a person if:
(a) the person is a natural person against whom a prescribed State or Territory order is in force; or
(b) the person is a body corporate, and a prescribed State or Territory order is in force against a director, secretary or senior manager of the body corporate who would perform duties in relation to the credit activities to be authorised by the licence; or
(c) the person is a partnership or the trustees of a trust, and a prescribed State or Territory order is in force against a partner or trustee who would perform duties in relation to the credit activities to be authorised by the licence.
41 Applicant must be given hearing before refusal of licence
ASIC may only refuse to grant a licence after giving the person who applied for the licence an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that takes place in private; and
(b) to make submissions to ASIC in relation to the refusal.
42 Notice of grant or refusal of licence and date of effect
(1) ASIC must give a person (the applicant) who has applied for a licence written notice of:
(a) ASIC’s decision on the application; and
(b) if the decision is to grant the applicant a licence—the day on which the licence takes effect; and
(c) if the decision is not to grant the applicant a licence—the reasons for the decision.
(2) The licence comes into force on the day specified in the notice, which must not be before the day on which the decision to grant the licence was made.
43 Australian credit licence numbers
(1) ASIC must allocate each licence a unique Australian credit licence number when it is granted.
(2) If:
(a) a person is granted a licence; and
(b) the person holds an Australian financial services licence;
then the Australian credit licence number that ASIC gives to the licence held by that person must be the same number as the person’s Australian financial services licence number.
(3) ASIC must give the licensee written notice of the Australian credit licence number.
44 Basis on which licence is granted
A licence granted under this Division is granted on the basis that:
(a) conditions on the licence may be imposed, varied or revoked under section 45 or 46; and
(b) the licence may be suspended under section 54, 55 or 56; and
(c) the licence may be cancelled under section 54, 55 or 56; and
(d) the licence may be varied under section 57; and
(e) the licence may be cancelled, revoked, terminated or varied by or under later legislation; and
(f) no compensation is payable if:
(i) conditions on the licence are imposed, varied or revoked as referred to in paragraph (a); or
(ii) the licence is suspended, cancelled, varied, revoked or terminated as referred to in paragraphs (b) to (e).
Division 4—Conditions on an Australian credit licence
45 The conditions on the licence
ASIC may impose, vary or revoke conditions on licences
(1) ASIC may, at any time:
(a) impose conditions, or additional conditions, on a licence; and
(b) vary or revoke conditions imposed on a licence.
(2) ASIC may do so:
(a) on its own initiative; or
(b) if the licensee lodges an application with ASIC for the imposition, variation or revocation.
(3) The application must be in the approved form.
Notice and effect of imposition, variation or revocation of conditions
(4) ASIC must give the licensee written notice of the imposition, variation or revocation of the conditions. The imposition, variation or revocation of the conditions comes into force on the day specified in the notice, which must not be before the day on which the decision to impose, vary or revoke the conditions was made.
ASIC must give the licensee a hearing
(5) Despite subsection (1), ASIC may only impose conditions or additional conditions, or vary or revoke the conditions, on the licence after giving the licensee an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that takes place in private; and
(b) to make submissions to ASIC in relation to the conditions.
This subsection does not apply to ASIC imposing conditions when the licence is granted.
Condition in relation to credit activities authorised
(6) ASIC must ensure that the licence is subject to a condition that specifies the credit activities or classes of credit activities that the licensee is authorised to engage in.
Regulations may prescribe conditions
(7) The licence is subject to such other conditions as are prescribed by the regulations. However, ASIC cannot vary or revoke those conditions.
46 Licence conditions—special procedures for APRA‑regulated bodies
Special procedures for APRA‑regulated bodies (other than ADIs)
(1) If the licensee, or a related body corporate, is a body (the APRA body) regulated by APRA (other than an ADI), then the following provisions apply:
(a) ASIC cannot:
(i) impose, vary or revoke a condition on the licence that, in ASIC’s opinion, has or would have the result of preventing the APRA body from being able to carry on all or any of its usual activities (being activities in relation to which APRA has regulatory or supervisory responsibilities); or
(ii) vary a condition so that it would, in ASIC’s opinion, become a condition that would have a result as described in subparagraph (i);
unless ASIC has first consulted APRA about the proposed action;
(b) if ASIC imposes, varies or revokes a condition on the licence and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken.
Special procedures for ADIs
(2) If the licensee, or a related body corporate, is an ADI, then the following provisions apply:
(a) subject to paragraphs (b) and (c), the powers that ASIC would otherwise have under section 45:
(i) to impose, vary or revoke a condition on the licence that, in ASIC’s opinion, has or would have the result of preventing the ADI from being able to carry on all or any of its banking business (within the meaning of the Banking Act 1959); or
(ii) to vary a condition so that it would, in ASIC’s opinion, become a condition that would have a result as described in subparagraph (i);
are instead powers of the Minister;
(b) the following provisions apply in relation to a power to which paragraph (a) applies:
(i) the procedures for the exercise of the power are the same as would apply if ASIC could exercise the power, except that the Minister must not exercise the power unless he or she has first considered advice from ASIC on the proposed action, being advice given after ASIC has consulted APRA about the proposed action;
(ii) ASIC (rather than the Minister) must still conduct any hearing required under paragraph 45(5)(a) and receive any submissions under paragraph 45(5)(b);
(c) if ASIC imposes, varies or revokes a condition on the licence and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken.
Division 5—Obligations of licensees
47 General conduct obligations of licensees
General conduct obligations
(1) A licensee must:
(a) do all things necessary to ensure that the credit activities authorised by the licence are engaged in efficiently, honestly and fairly; and
(b) have in place adequate arrangements to ensure that clients of the licensee are not disadvantaged by any conflict of interest that may arise wholly or partly in relation to credit activities engaged in by the licensee or its representatives; and
(c) comply with the conditions on the licence; and
(d) comply with the credit legislation; and
(e) take reasonable steps to ensure that its representatives comply with the credit legislation; and
(f) maintain the competence to engage in the credit activities authorised by the licence; and
(g) ensure that its representatives are adequately trained, and are competent, to engage in the credit activities authorised by the licence; and
(h) have an internal dispute resolution procedure that:
(i) complies with standards and requirements made or approved by ASIC in accordance with the regulations; and
(ii) covers disputes in relation to the credit activities engaged in by the licensee or its representatives; and
(i) be a member of an approved external dispute resolution scheme; and
(j) have compensation arrangements in accordance with section 48; and
(k) have adequate arrangements and systems to ensure compliance with its obligations under this section, and a written plan that documents those arrangements and systems; and
(l) unless the licensee is a body regulated by APRA:
(i) have available adequate resources (including financial, technological and human resources) to engage in the credit activities authorised by the licence and to carry out supervisory arrangements; and
(ii) have adequate risk management systems; and
(m) comply with any other obligations that are prescribed by the regulations.
Assessment of whether compliance is adequate
(2) For the purposes of paragraphs (1)(b), (g), (k) and (l), in considering whether a matter is adequate, the nature, scale and complexity of the credit activities engaged in by the licensee must be taken into account.
Regulations in relation to internal dispute resolution procedures
(3) Regulations made for the purposes of paragraph (1)(h) may also deal with the variation or revocation of:
(a) standards or requirements made by ASIC; or
(b) approvals given by ASIC.
48 Requirements for compensation arrangements
Requirement to have adequate compensation arrangements
(1) A licensee must have adequate arrangements for compensating persons for loss or damage suffered because of a contravention of this Act by the licensee or its representatives.
When arrangements are adequate
(2) For the purposes of subsection (1), arrangements are adequate if, and only if, they:
(a) satisfy any requirements prescribed by the regulations; or
(b) are approved in writing by ASIC.
Approval of arrangements by ASIC
(3) Before approving arrangements under paragraph (2)(b), ASIC must have regard to:
(a) the credit activities authorised by the licence; and
(b) whether the arrangements will continue to cover persons after the licensee ceases to engage in credit activities, and the length of time for which that cover will continue; and
(c) any other matters that are prescribed by the regulations.
(4) Without limiting paragraph (3)(c), the regulations may, in particular, prescribe additional details in relation to the matters to which ASIC must have regard under paragraphs (3)(a) and (b).
49 Obligation to provide a statement or obtain an audit report if directed by ASIC
Notice to licensee to provide a statement
(1) ASIC may give a licensee a written notice directing the licensee to lodge with ASIC a written statement containing specified information about the credit activities engaged in by the licensee or its representatives.
(2) Notices under subsection (1):
(a) may be given at any time; and
(b) may be given to one or more particular licensees, or to each licensee in one or more classes of licensee, or to all licensees; and
(c) may require all the same information, or may contain differences as to the information they require; and
(d) may require a statement containing information to be given on a periodic basis, or each time a particular event or circumstance occurs, without ASIC having to give a further written notice.
Notice to licensee to obtain an audit report
(3) ASIC may also give a licensee a written notice directing the licensee to obtain an audit report, prepared by a suitably qualified person specified in the notice, on a statement, or on each statement in a class of statements, under subsection (1) before the statement is given to ASIC.
(4) A notice under subsection (3) is not a legislative instrument.
Notice must specify day by which licensee must comply
(5) A notice given under this section must specify the day by which the licensee must comply with the notice (which must be a reasonable period after the notice is given). ASIC may extend the day by giving a written notice to the licensee.
Requirement to comply with notice
(6) The licensee must comply with a notice given under this section within the time specified in the notice.
Civil penalty: 2,000 penalty units.
Offence
(7) A person commits an offence if:
(a) the person is subject to a requirement under subsection (6); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.
Strict liability offence
(8) A person commits an offence if:
(a) the person is subject to a requirement under subsection (6); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 10 penalty units.
(9) Subsection (8) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
50 Obligation to give ASIC information required by the regulations
Regulations may require licensee to give information
(1) The regulations may require a licensee, or each licensee in a class of licensees, to give ASIC specified information about the credit activities engaged in by the licensee or its representatives.
Requirement to comply with regulations
(2) If regulations under subsection (1) require a licensee to give ASIC information, the licensee must give ASIC that information.
Civil penalty: 2,000 penalty units.
Offence
(3) A person commits an offence if:
(a) the person is subject to a requirement to give ASIC information under subsection (2); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.
Strict liability offence
(4) A person commits an offence if:
(a) the person is subject to a requirement to give ASIC information under subsection (2); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 10 penalty units.
(5) Subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
51 Obligation to provide ASIC with assistance if reasonably requested
Requirement to provide assistance
(1) If ASIC, or a person authorised by ASIC, reasonably requests assistance from a licensee in relation to whether the licensee and its representatives are complying with the credit legislation, the licensee must give ASIC or the authorised person the requested assistance.
Civil penalty: 2,000 penalty units.
(2) If the request is in writing, it is not a legislative instrument.
Offence
(3) A person commits an offence if:
(a) the person is subject to a requirement to give ASIC or an authorised person assistance under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.
Assistance may include showing ASIC credit books etc.
(4) The assistance referred to in subsection (1) may include showing ASIC the person’s credit books or giving ASIC other information.
52 Obligation to cite Australian credit licence number
When this section applies
(1) This section applies on or after the day that is 2 years after the day section 3 commences.
Requirement to include licence number in documents
(2) Whenever a licensee identifies itself in a document of a kind prescribed by the regulations, the licensee must:
(a) include in the document the licensee’s Australian credit licence number; and
(b) identify in the document that the number is the licensee’s Australian credit licence number.
Civil penalty: 2,000 penalty units.
Strict liability offence
(3) A person commits an offence if:
(a) the person is subject to a requirement under subsection (2) to include and identify its Australian credit licence number in a document; and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 10 penalty units.
(4) Subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
53 Obligation to lodge annual compliance certificate
Requirement to lodge annual compliance certificate
(1) A licensee must, no later than 45 days after the licensee’s licensing anniversary in each year, lodge a compliance certificate with ASIC in accordance with this section. ASIC may extend the day by giving a written notice to the licensee.
Civil penalty: 2,000 penalty units.
Compliance certificate must be in approved form
(2) The compliance certificate must be in the approved form.
Who must sign compliance certificate
(3) The compliance certificate must be signed by:
(a) if the licensee is a single natural person—the licensee; or
(b) if the licensee is a body corporate—a person of a kind prescribed by the regulations; or
(c) if the licensee is a partnership or the trustees of a trust—a partner or trustee who performs duties in relation to credit activities.
Requirement to ensure compliance certificate is lodged
(4) Each person by whom the compliance certificate may be signed under subsection (3) must ensure that the licensee lodges the compliance certificate with ASIC in accordance with this section.
Civil penalty: 2,000 penalty units.
Strict liability offence
(5) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1) or (4); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 60 penalty units.
(6) Subsection (5) is an offence of strict liability.
Meaning of licensing anniversary
(7) Licensing anniversary of a licensee means the anniversary of the day on which the licensee’s licence came into force under section 42.
Division 6—When a licence can be suspended, cancelled or varied
Subdivision A—Suspensions and cancellations
54 Suspension or cancellation without hearing
(1) ASIC may suspend or cancel a licensee’s licence if:
(a) the licensee lodges with ASIC an application for the suspension or cancellation; or
(b) the licensee does not engage, or ceases to engage, in credit activities; or
(c) any of the matters set out in subsection (2) applies to any of the following persons:
(i) the licensee;
(ii) if the licensee is a body corporate—a director, secretary or senior manager of the body corporate who performs duties in relation to credit activities;
(iii) if the licensee is a partnership or the trustees of a trust—a partner or trustee who performs duties in relation to credit activities.
(2) For the purposes of paragraph (1)(c), the matters are as follows:
(a) if the person is not the trustees of a trust—the person is insolvent;
(b) if the person is a natural person:
(i) the person is convicted of serious fraud; or
(ii) the person is incapable of managing his or her affairs because of physical or mental incapacity; or
(iii) a prescribed State or Territory order is in force against the person.
(3) An application for suspension or cancellation of a licence must be in the approved form.
55 Suspension or cancellation after offering a hearing
(1) ASIC may suspend or cancel a licensee’s licence (subject to complying with subsection (4)) if:
(a) the licensee has contravened an obligation under section 47 (which deals with general conduct obligations of licensees); or
(b) ASIC has reason to believe that the licensee is likely to contravene an obligation under that section; or
(c) ASIC has reason to believe that the licensee is not a fit and proper person to engage in credit activities; or
(d) the application for the licence:
(i) was false in a material particular or materially misleading; or
(ii) omitted a material matter.
(2) For the purposes of paragraphs (1)(b) and (c), ASIC must (subject to Part VIIC of the Crimes Act 1914) have regard to the following:
(a) if the person is a natural person—the matters set out in paragraphs 37(2)(a) to (f) and subparagraph 37(2)(g)(i) in relation to the person;
(b) if the person is not a natural person:
(i) the matters set out in paragraphs 37(2)(a) to (f) in relation to the person; and
(ii) whether ASIC has reason to believe that any of the persons referred to in paragraph 37(2)(h) in relation to the person is not a fit and proper person to engage in credit activities;
(c) any criminal conviction of the person, within 10 years before the licence is proposed to be suspended or cancelled;
(d) any other matter ASIC considers relevant;
(e) any other matter prescribed by the regulations.
Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them.
(3) ASIC must (subject to Part VIIC of the Crimes Act 1914), in considering whether it has reason to believe that a person referred to in subparagraph (2)(b)(ii) is not a fit and proper person to engage in credit activities, have regard to the matters set out in paragraphs (2)(a), (c), (d) and (e) in relation to the person.
(4) ASIC may only suspend or cancel a licensee’s licence under this section after giving the licensee an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that takes place in private; and
(b) to make submissions to ASIC on the matter.
56 Suspension and cancellation—special procedures for APRA‑regulated bodies
Special procedures for APRA‑regulated bodies (other than ADIs)
(1) If a licensee, or a related body corporate, is a body (the APRA body) regulated by APRA (other than an ADI), then the following provisions apply:
(a) ASIC cannot suspend or cancel the licensee’s licence if doing so would, in ASIC’s opinion, have the result of preventing the APRA body from being able to carry on all or any of its usual activities (being activities in relation to which APRA has regulatory or supervisory responsibilities), unless ASIC has first consulted APRA about the proposed action;
(b) if ASIC suspends or cancels the licensee’s licence and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken.
Special procedures for ADIs
(2) If:
(a) a licensee is an ADI; or
(b) a related body corporate of a licensee is an ADI, and cancellation or suspension of the licensee’s licence would, in ASIC’s opinion, have the result of preventing the ADI from being able to carry on all or any of its banking business (within the meaning of the Banking Act 1959);
then the following provisions have effect:
(c) subject to paragraph (d), the powers that ASIC would otherwise have under this Division to cancel or suspend the licensee’s licence, or to revoke a suspension to which this subsection applied, are instead powers of the Minister;
(d) the procedures for the exercise of a power to which paragraph (c) applies are the same as would apply if ASIC could exercise the power, except that the Minister must not exercise the power unless he or she has first considered advice from ASIC on the proposed action, being advice given after ASIC has consulted APRA about the proposed action;
(e) ASIC (rather than the Minister) must still conduct any hearing required under paragraph 55(4)(a) and receive any submissions under paragraph 55(4)(b).
Subdivision B—Variations
57 Varying licences
ASIC may vary a person’s licence to take account of a change in the person’s name.
Note: The conditions on the licence can be varied under section 45.
Subdivision C—Miscellaneous rules about suspensions, cancellations and variations
58 Effect of suspension
(1) A suspended licence has no effect while it remains suspended.
(2) Subsection (1) has effect subject to section 62 (which deals with the continued effect of some suspended or cancelled licences).
59 Revocation of suspension
ASIC may at any time revoke the suspension of a licence.
60 Date of effect, notice and publication of variation, cancellation or suspension etc.
(1) ASIC must give a licensee written notice of a variation, suspension, revocation of a suspension, or cancellation of the licensee’s licence.
(2) A variation, suspension, revocation of a suspension, or cancellation of a licence comes into force when the written notice of that action is given to the licensee.
(3) As soon as practicable after the notice is given to the licensee, ASIC must publish a notice of the action on ASIC’s website. The notice must state when the action took effect.
61 Statement of reasons
A notice of suspension or cancellation given to a licensee must be accompanied by a statement of reasons for the action taken.
62 ASIC may allow licence to continue in force
(1) If ASIC gives a written notice of suspension or cancellation to a licensee, ASIC may include terms in the notice specifying that the licence continues in force as though the suspension or cancellation had not happened for the purposes of specified provisions of this Act in relation to specified matters, a specified period, or both.
(2) If ASIC includes terms in a notice under subsection (1), the licence continues in force in accordance with the terms of the notice.
Part 2‑3—Credit representatives and other representatives of licensees
Division 1—Introduction
63 Guide to this Part
This Part is about credit representatives of licensees (which are a particular type of representative of licensees). A person who is authorised as a credit representative of a licensee does not need to hold an Australian credit licence when engaging in credit activities on behalf of the licensee.
This Part also deals with information that ASIC may give to licensees about their representatives (such as their employees, directors and credit representatives, and persons who act on their behalf), and the liability of licensees for their representatives.
Division 2 deals with how a credit representative may be authorised to engage in credit activities on behalf of a licensee. It also deals with certain obligations of licensees in relation to the authorisation of their credit representatives.
Division 3 deals with information about representatives that ASIC may give to a licensee and the use of that information.
Division 4 deals with the liability of licensees for the conduct of their representatives.
Division 2—Authorisation of credit representatives
64 Licensee may authorise credit representatives
Authorisation of credit representative by licensee
(1) A licensee may give a person a written notice authorising the person to engage in specified credit activities on behalf of the licensee.
(2) A person who is authorised under subsection (1) is a credit representative of the relevant licensee.
(3) The credit activities specified may be some or all of the credit activities authorised by the licensee’s licence.
When authorisation is of no effect
(4) The authorisation:
(a) is of no effect if subsection (5) applies to it when it is given; and
(b) ceases to have effect if and when subsection (5) starts to apply to it after it is given;
to the extent that subsection (5) applies.
(5) This section applies to the authorisation to the extent that it purports to authorise:
(a) a person to engage in a credit activity that is not authorised by the licensee’s licence; or
(b) a person to engage in a credit activity, and a banning order or disqualification order under Part 2‑4 is in force against the person in relation to the credit activity; or
(c) a person who is not a member of an approved external dispute resolution scheme; or
(d) a person who is banned from engaging in a credit activity under a law of a State or Territory; or
(e) a natural person who has been convicted, within the last 10 years, of serious fraud; or
(f) a natural person against whom a prescribed State or Territory order is in force; or
(g) a person that is a body corporate, if a prescribed State or Territory order is in force against a director, secretary or senior manager of the body corporate who would perform duties in relation to the credit activities specified in the authorisation; or
(h) a person that is a partnership or the trustees of a trust, if a prescribed State or Territory order is in force against a partner or trustee who would perform duties in relation to the credit activities specified in the authorisation.
65 Credit representative that is a body corporate may sub‑authorise natural persons as credit representatives
Authorisation of natural person as credit representative by credit representative that is a body corporate
(1) A body corporate that is a credit representative of a licensee may, in that capacity, give a natural person a written notice authorising that natural person to engage in specified credit activities on behalf of the licensee.
(2) A natural person who is authorised under subsection (1) is a credit representative of the relevant licensee.
(3) The credit activities specified may be some or all of the credit activities authorised by the licensee’s licence.
Licensee must give consent to authorisation
(4) The authorisation can only be given if the licensee gives the body corporate its written consent to the authorisation. The licensee may give consent in relation to either a specified natural person or a specified class of natural persons (the membership of which might change from time to time).
When authorisation is of no effect
(5) The authorisation:
(a) is of no effect if subsection (6) applies to it when it is given; and
(b) ceases to have effect if and when subsection (6) starts to apply to it after it is given;
to the extent that subsection (6) applies.
(6) This subsection applies to the authorisation to the extent that it purports to authorise:
(a) a natural person to engage in a credit activity that is not authorised by the licensee’s licence; or
(b) a natural person to engage in a credit activity, and a banning order or disqualification order under Part 2‑4 is in force against the natural person in relation to the credit activity; or
(c) a natural person who is not a member of an approved external dispute resolution scheme; or
(d) a natural person who is banned from engaging in a credit activity under a law of a State or Territory; or
(e) a natural person who has been convicted, within the last 10 years, of serious fraud; or
(f) a natural person against whom a prescribed State or Territory order is in force; or
(g) a natural person in relation to the authorisation of whom the licensee has not given its written consent in accordance with subsection (4).
(7) To avoid doubt, an authorisation under subsection (1) is taken, for the purposes of sections 66 to 72, to be given by the body corporate, not the licensee.
66 Credit representative of 2 or more licensees
(1) One person can be the credit representative of 2 or more licensees, but only if:
(a) each of those licensees has consented to the person also being the credit representative of each of the other licensees; or
(b) each of the licensees is a related body corporate of each of the other licensees.
(2) An authorisation:
(a) is of no effect if it contravenes subsection (1) when it is given; and
(b) ceases to have effect if and when it starts to contravene subsection (1) after it is given.
67 A person cannot be a credit representative in relation to credit activities authorised by a person’s licence
(1) A person must not authorise another person to engage in a credit activity as a credit representative under subsection 64(1) or 65(1) if the other person holds a licence authorising the person to engage in the credit activity.
(2) An authorisation:
(a) is of no effect if it contravenes subsection (1) when it is given; and
(b) ceases to have effect if and when it starts to contravene subsection (1) after it is given.
68 Variation and revocation of authorisations and sub‑authorisations
Variation and revocation of authorisations
(1) An authorisation under subsection 64(1) may be varied or revoked at any time by the licensee giving written notice to the credit representative.
Variation and revocation of sub‑authorisations
(2) An authorisation under subsection 65(1) may be varied or revoked at any time by:
(a) the licensee in relation to whom the authorisation was given; or
(b) the body corporate that gave the authorisation;
giving written notice to the credit representative.
(3) If a person varies or revokes an authorisation under subsection (2), that person must give the other person who could have varied or revoked the authorisation written notice of the variation or revocation.
69 Obligation not to give authorisation that has no effect
Requirement not to give authorisation
(1) A person must not purport to authorise a credit representative under subsection 64(1) or 65(1) if, at the time the person first purports to give the authorisation, it is of no effect, to any extent, under this Division.
Civil penalty: 2,000 penalty units.
Offence
(2) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 100 penalty units, or 2 years imprisonment, or both.
70 Obligation to vary or revoke authorisation that ceases to have effect
Requirement to vary or revoke authorisation
(1) If a person:
(a) has authorised a credit representative under subsection 64(1) or 65(1); and
(b) becomes aware of a matter because of which the authorisation of the credit representative has ceased to have effect under this Division;
the person must, as soon as practicable:
(c) revoke the authorisation; or
(d) vary the authorisation so that it is no longer, to any extent, of no effect under this Division.
Civil penalty: 2,000 penalty units.
Offence
(2) A person commits an offence if:
(a) the person is required to vary or revoke an authorisation under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes subsection (1).
Criminal penalty: 100 penalty units, or 2 years imprisonment, or both.
71 Obligation to notify ASIC etc. about credit representatives
Requirement to notify ASIC when credit representative authorised
(1) If a person authorises a credit representative under subsection 64(1) or 65(1), the person must, within 15 business days of the authorisation, lodge with ASIC a written notice in accordance with subsection (3).
Civil penalty: 2,000 penalty units.
Requirement to notify licensee of sub‑authorisation
(2) If:
(a) a person authorises a natural person as a credit representative of a licensee under subsection 65(1) (which deals with sub‑authorisations); and
(b) the consent of the licensee to the authorisation was given in relation to a specified class of natural persons;
then the person must, within 15 business days of the authorisation, give the licensee written notice of the authorisation in accordance with subsection (3).
Civil penalty: 2,000 penalty units.
Details to be included in notice
(3) The notice must include the following details:
(a) the name and business address of the credit representative;
(b) details of the authorisation, including the date on which it was made and what the credit representative is authorised to do on behalf of the licensee;
(c) details of the external dispute resolution scheme of which the credit representative is a member;
(d) details of each other licensee on behalf of whom the credit representative is a credit representative.
Requirement to notify ASIC of change in details etc.
(4) If:
(a) a person authorises a credit representative under subsection 64(1) or 65(1); and
(b) either:
(i) any of the details that are referred to in subsection (3) in relation to the credit representative changes; or
(ii) the person revokes the authorisation;
then the person must, within 10 business days of the change or revocation, lodge with ASIC a written notice of the change or revocation.
Civil penalty: 2,000 penalty units.
(5) A notice given under subsection (1), (2) or (4) must be in the approved form.
Strict liability offence
(6) A person commits an offence if:
(a) the person is subject to a requirement to give a notice under subsection (1), (2) or (4); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.
(7) Subsection (6) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
72 Credit representative numbers
(1) Within a reasonable period after receiving a notice under subsection 71(1) of the authorisation of a credit representative, ASIC must allocate the credit representative a unique credit representative number.
(2) ASIC must give written notice of the credit representative number to:
(a) the credit representative; and
(b) the person who authorised the credit representative.
(3) This section does not apply in relation to a credit representative that has already been allocated a credit representative number.
Division 3—Information about representatives
73 ASIC may give licensee information about representatives
ASIC may give licensee information about representatives
(1) If ASIC considers it appropriate to do so, it may give information to a licensee about a person whom ASIC believes is, or will be, a representative of the licensee. However, ASIC may only do so if it believes, on reasonable grounds, that the information is true.
Requirements about use of information
(2) A licensee to whom information is given under subsection (1) may make use of, make a record of, or give to another person, the information for a purpose connected with:
(a) the licensee making a decision about what action (if any) to take in relation to the representative, as a consequence of receiving the information; or
(b) the licensee taking action pursuant to such a decision.
(3) A licensee to whom information is given under subsection (1) must not make use of, make a record of, or give to another person, the information other than as permitted by subsection (2).
Civil penalty: 2,000 penalty units.
(4) A person to whom information has been given for a purpose or purposes under subsection (2) or this subsection may make use of, make a record of, or give to another person, that information for that purpose or any of those purposes.
(5) A person to whom information has been given for a purpose or purposes under subsection (2) or (4) must not make use of, make a record of, or give to another person, the information other than as permitted by subsection (4).
Civil penalty: 2,000 penalty units.
Offence
(6) A person commits an offence if:
(a) the person is subject to a requirement under subsection (3) or (5); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units, or 1 year imprisonment, or both.
Qualified privilege
(7) A person has qualified privilege in relation to an act done by the person under subsection (2) or (4).
Use of information obtained under this section in court
(8) A person to whom information is given in accordance with this section must not give any of the information to a court, or produce in a court a document that sets out some or all of the information, except:
(a) for a purpose connected with:
(i) a licensee making a decision about what action (if any) to take in relation to the representative, as a consequence of receiving some or all of the information; or
(ii) a licensee taking action pursuant to that decision; or
(iii) proving in proceedings in that court that particular action taken by a licensee in relation to the representative was taken pursuant to that decision; or
(b) in proceedings in that court, in so far as the proceedings relate to an alleged contravention of this section; or
(c) in proceedings about giving to a court false information some, at least, of which was the information given under this section.
(9) For the purposes of subsection (8), a licensee takes action in relation to a representative if the licensee:
(a) takes action by way of making, terminating or varying the terms and conditions of an agreement; or
(b) otherwise takes action in relation to an agreement;
to the extent that the agreement relates to the representative acting on behalf of the licensee.
(10) Subsection (8) also has the effect it would have if:
(a) a reference in it to a court were a reference to a court of an external Territory or of a country outside Australia and the external Territories; and
(b) paragraph (8)(b) were omitted.
Division 4—Liability of licensees for representatives
74 Application of this Division
This Division applies to any conduct of a representative of a licensee:
(a) that relates to a credit activity; and
(b) on which a third person (the client) could reasonably be expected to rely; and
(c) on which the client in fact relied in good faith.
75 Responsibility if representative of only one licensee
If the representative is the representative of only one licensee, the licensee is responsible, as between the licensee and the client, for the conduct of the representative, whether or not the representative’s conduct is within the authority of the licensee.
76 Representatives of multiple licensees
When this section applies
(1) This section applies if the representative is the representative of more than one licensee.
Conduct covered by only one authority
(2) If:
(a) the representative is the representative of one of the licensees only in relation to a particular class of credit activity; and
(b) the conduct relates to that class of credit activity;
that licensee is responsible for the conduct, as between that licensee and the client, whether or not the conduct is within the authority of the licensee.
Conduct covered by multiple authorities
(3) If:
(a) the representative is the representative of more than one of the licensees in relation to a particular class of credit activity; and
(b) the conduct relates to that class of credit activity; and
(c) the conduct is within the authority of:
(i) only one of those licensees (the authorising licensee); or
(ii) 2 or more of those licensees (the authorising licensees);
then:
(d) if subparagraph (c)(i) applies—the authorising licensee is responsible for the conduct, as between that licensee and the client; or
(e) if subparagraph (c)(ii) applies—the authorising licensees are jointly and severally responsible for the conduct, as between themselves and the client.
All other cases
(4) In any other case, all of the licensees are jointly and severally responsible for the conduct, as between themselves and the client, whether or not the representative’s conduct is within the authority of any of them.
77 Responsibility extends to loss or damage suffered by client
The responsibility of a licensee under this Division extends so as to make the licensee liable to the client in relation to any loss or damage suffered by the client as a result of the representative’s conduct.
78 Effect of this Division
(1) If a licensee is responsible for the conduct of its representative under this Division, the client has the same remedies against the licensee that the client has against the representative.
(2) The licensee and the representative (along with any other licensees that are also responsible) are all jointly and severally liable to the client in relation to those remedies.
(3) However, nothing in this Division imposes:
(a) any criminal responsibility; or
(b) any civil liability under a provision of this Act apart from this Division;
on a licensee that would not otherwise be imposed on the licensee.
(4) This Division does not relieve a representative of a licensee of any liability that the representative has to the client or the licensee.
(5) An agreement has no effect in so far as it purports to alter or restrict the operation of section 75, 76 or 77.
(6) However, subsection (5) does not apply to the extent that the agreement:
(a) provides for a representative of a licensee to indemnify the licensee for a liability of the licensee in relation to the representative; or
(b) provides for a licensee, for whom a representative acts, to indemnify another licensee for a liability in relation to the representative.
(7) A licensee must not make, or offer to make, an agreement that has, or would have, no effect under subsection (5).
Part 2‑4—Banning or disqualification of persons from engaging in credit activities
Division 1—Introduction
79 Guide to this Part
This Part is about the banning and disqualification of persons from engaging in credit activities.
Division 2 deals with banning orders, which are orders made by ASIC that prohibit a person from engaging in credit activities.
Division 3 deals with disqualification orders, which are orders of the court that disqualify a person from engaging in credit activities.
Division 2—Banning orders
80 ASIC’s power to make a banning order
(1) ASIC may make a banning order against a person:
(a) if ASIC suspends or cancels a licence of the person; or
(b) for a person other than the trustees of a trust—if the person becomes insolvent; or
(c) for a natural person—if the person is convicted of fraud; or
(d) if the person has:
(i) contravened any credit legislation; or
(ii) been involved in a contravention of a provision of any credit legislation by another person; or
(e) if ASIC has reason to believe that the person is likely to:
(i) contravene any credit legislation; or
(ii) be involved in a contravention of a provision of any credit legislation by another person; or
(f) if ASIC has reason to believe that the person is not a fit and proper person to engage in credit activities; or
(g) if a prescribed State or Territory order is in force against the person; or
(h) in any other circumstances prescribed by the regulations.
(2) For the purposes of paragraphs (1)(e) and (f), ASIC must (subject to Part VIIC of the Crimes Act 1914) have regard to the following:
(a) if the person is a natural person—the matters set out in paragraphs 37(2)(a) to (f) and subparagraph 37(2)(g)(i) in relation to the person;
(b) if the person is not a natural person:
(i) the matters set out in paragraphs 37(2)(a) to (f) in relation to the person; and
(ii) whether ASIC has reason to believe that any of the persons referred to in paragraph 37(2)(h) in relation to the person is not a fit and proper person to engage in credit activities;
(c) any criminal conviction of the person, within 10 years before the banning order is proposed to be made;
(d) any other matter ASIC considers relevant;
(e) any other matter prescribed by the regulations.
Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them.
(3) ASIC must (subject to Part VIIC of the Crimes Act 1914), in considering whether it has reason it has reason to believe that a person referred to in subparagraph (2)(b)(ii) is not a fit and proper person to engage in credit activities, have regard to the matters set out in paragraphs (2)(a), (c), (d) and (e) in relation to the person.
(4) Despite subsection (1), ASIC may only make a banning order against a person after giving the person an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that takes place in private; and
(b) to make submissions to ASIC on the matter.
(5) Subsection (4) does not apply if:
(a) ASIC’s grounds for making the banning order against the person include that ASIC has suspended or cancelled a licence of the person (see paragraph (1)(a)); and
(b) the suspension or cancellation took place without a hearing under section 54.
(6) Subsection (4) also does not apply if:
(a) ASIC’s grounds for making the banning order against the person include that the person has been convicted of fraud (see paragraph (1)(c)); and
(b) the person has been convicted of serious fraud.
(7) ASIC must give a copy of the banning order to the person against whom it was made.
81 What is a banning order?
(1) A banning order is a written order that prohibits a person from engaging in any credit activities or specified credit activities in specified circumstances or capacities.
(2) The order may prohibit the person against whom it is made from engaging in a credit activity:
(a) permanently; or
(b) for a specified period.
(3) A banning order may include a provision allowing the person against whom it was made, subject to any specified conditions:
(a) to do specified acts; or
(b) to do specified acts in specified circumstances;
that the order would otherwise prohibit them from doing.
(4) A banning order is not a legislative instrument.
82 Effect of banning orders
Requirement not to engage in conduct contrary to banning order
(1) A person must not engage in conduct that is contrary to a banning order that is in force against the person.
Civil penalty: 2,000 penalty units.
Offence
(2) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 100 penalty units, or 2 years imprisonment, or both.
Note: A person against whom a banning order is in force cannot be granted a licence authorising the person to engage in a credit activity to which the banning order applies (see subsection 40(1)).
83 Variation or cancellation of banning orders
(1) ASIC may vary or cancel a banning order if ASIC is satisfied that it is appropriate to do so because of a change in any of the circumstances based on which ASIC made the order.
(2) ASIC may do so:
(a) on its own initiative; or
(b) if the person against whom the order was made lodges with ASIC an application for the variation or cancellation.
(3) The application must be in the approved form.
(4) If ASIC proposes not to vary or cancel a banning order in accordance with an application given by a person under paragraph (2)(b), ASIC must give the person an opportunity:
(a) to appear, or be represented, at a hearing before ASIC that takes place in private; and
(b) to make submissions to ASIC on the matter.
(5) ASIC must give written notice of the variation or cancellation of a banning order to the person against whom the order was made.
84 Date of effect, notice and publication of banning order, variation or cancellation
(1) A banning order comes into force when it is given to the person against whom it is made.
(2) A variation or cancellation of a banning order comes into force when written notice of the variation or cancellation is given to the person against whom the order was made.
(3) ASIC must publish a notice on ASIC’s website as soon as practicable after making, varying or cancelling a banning order. The notice must state when the banning order, or variation or cancellation of the banning order, came into force and:
(a) in the case of the making of a banning order—set out a copy of the banning order; or
(b) in the case of the variation of a banning order—set out a copy of the banning order as varied.
(4) However, if the banning order contains a provision of the kind referred to in subsection 81(3) and ASIC considers that the notice on its website would be unreasonably long if that provision were included, the notice may instead set out a summary of the provision’s effect.
85 Statement of reasons
(1) A copy of a banning order given to a person must be accompanied by a statement of reasons for the order.
(2) If ASIC varies a banning order made against a person, ASIC must, on request by the person, give the person a statement of reasons for the variation.
Division 3—Disqualification by the court
86 Disqualification by the court
(1) ASIC may apply to the court for an order under subsection (2) in relation to a person if ASIC:
(a) cancels a licence of the person; or
(b) makes a banning order against the person that is to operate permanently.
(2) The court may make:
(a) an order disqualifying the person, permanently or for a specified period, from engaging in credit activities, or specified credit activities, in specified circumstances or capacities; or
(b) any other order the court considers appropriate.
Note: A person against whom a disqualification order is in force cannot be granted a licence authorising the person to engage in a credit activity to which the disqualification order applies (see subsection 40(1)).
Part 2‑5—Financial records, trust accounts and audit reports
Division 1—Introduction
87 Guide to this Part
This Part is about financial records, trust accounts and matters relating to audit reports required under this Act.
Division 2 deals with the requirement for licensees to keep certain financial records, and provides for how those records must be kept.
Division 3 deals with trust accounts. Licensees that provide credit services and that receive money on behalf of others in the course of those services are required to maintain a trust account. Those licensees must also comply with requirements in relation to trust account money, trust account statements and trust account audit reports.
Division 4 has requirements relating to audit reports required by this Act, and the auditors that prepare those reports.
Division 2—Financial records of licensees
88 Obligation to keep financial records
Requirement to keep financial records
(1) A licensee must:
(a) keep financial records that correctly record and explain the transactions and financial position of any business of engaging in credit activities carried on by the licensee; and
(b) keep those records in accordance with this Division; and
(c) comply with subsection 90(2) in relation to the conversion of records into the English language; and
(d) comply with section 91 in relation to the location and production of records and particulars.
Civil penalty: 2,000 penalty units.
Meaning of financial records
(2) Financial records includes:
(a) invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes and vouchers; and
(b) documents of prime entry; and
(c) any trust account statement or trust account report required under section 100.
Offence
(3) A person commits an offence if:
(a) the person is subject to a requirement in relation to financial records under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes subsection (1).
Criminal penalty: 200 penalty units, or 5 years imprisonment, or both.
Financial records may be kept with other records
(4) A licensee does not contravene this Division merely because some or all of the financial records are prepared as a part of, or in conjunction with, the records relating to any other business that is carried on by the licensee.
Note: For the purposes of subsection (3), a defendant bears an evidential burden in relation to the matter in subsection (4) (see subsection 13.3(3) of the Criminal Code).
89 How financial records are to be kept
The financial records must be kept in a way that:
(a) enables true and fair profit and loss statements, and balance sheets, of the business referred to in paragraph 88(1)(a) to be prepared from time to time; and
(b) allows those statements and balance sheets to be conveniently and properly audited in accordance with the auditing standards (if any) prescribed by regulations made under section 106.
90 Language of financial records
(1) The financial records must be kept in writing in the English language, or in a manner that enables them to be readily accessible and readily converted into writing in the English language.
(2) If any of the financial records are not kept in writing in the English language, the licensee must, if required to convert the financial records concerned into writing in the English language by a person who is entitled to examine the financial records concerned, comply with the requirement within a reasonable time.
91 Location of financial records
If any of the financial records are kept outside this jurisdiction, the licensee must:
(a) cause to be sent to and retained at a place in this jurisdiction such particulars in relation to the business dealt with in those financial records as will enable true and fair profit and loss statements and balance sheets to be prepared; and
(b) if required by ASIC to produce those financial records at a place in this jurisdiction, comply with the requirement not later than 28 days after the requirement is made.
92 Information to be shown in financial records
The financial records must be kept in sufficient detail to show particulars of:
(a) all money received or paid by the licensee; and
(b) for each credit contract under which the licensee is the credit provider:
(i) the amount and day of all payments made by or on behalf of the debtor under the credit contract; and
(ii) all amounts (including principal, interest, fees and charges) owed by the debtor under the credit contract; and
(c) for each consumer lease under which the licensee is the lessor—the amount and day of all payments made by or on behalf of the lessee under the consumer lease; and
(d) for each guarantee under which the licensee is the beneficiary of the guarantee—the amount and day of all payments made by or on behalf of the guarantor under the guarantee; and
(e) all income received by the licensee from commissions, interest, and other sources, and all expenses, commissions, and interest paid by the licensee; and
(f) all the assets and liabilities (including contingent liabilities) of the licensee; and
(g) any other matters prescribed by the regulations.
93 Regulations may impose additional requirements
The regulations may impose additional requirements to be complied with in relation to the financial records including, for example:
(a) requirements for things to be contained in the records; and
(b) requirements relating to the level of detail to be shown in the records.
94 Financial records taken to be made with licensee’s authority
An entry in the records is, unless the contrary is proved, to be taken to have been made by, or with the authority of, the licensee.
95 Obligation to retain financial records for 7 years
Requirement to retain financial records
(1) A licensee that is required by this Division to make a financial record must retain it for 7 years after the transactions covered by the record are completed.
Civil penalty: 2,000 penalty units.
Regulations
(2) The regulations may prescribe financial records to which subsection (1) does not apply.
Records to be kept even if person stops carrying on business
(3) Financial records must be retained in accordance with this section, even if the person stops carrying on any business to which they relate.
Offence
(4) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units, or 6 months imprisonment, or both.
96 Financial records are prima facie evidence of matters
(1) In proceedings in a court, a financial record kept under this Division is admissible as prima facie evidence of any matter in the financial record.
(2) A document purporting to be a financial record kept by a licensee under this Division is, unless the contrary is proved, presumed to be a financial record kept by the licensee under this Division.
(3) If:
(a) because of subsection (1) a financial record is prima facie evidence of a matter; and
(b) the financial record, or a part of the financial, is kept or prepared by recording or storing matters (including that matter) by means of a mechanical, electronic or other device;
a written reproduction of that matter as so recorded or stored is admissible as prima facie evidence of that matter in a proceeding in a court.
(4) A written document that purports to reproduce a matter recorded or stored by means of a mechanical, electronic or other device is, unless the contrary is proved, presumed to be a reproduction of that matter.
Division 3—Trust accounts of credit service licensees
97 Application of this Division
This Division applies to a licensee (the credit service licensee) that:
(a) holds a licence that authorises the licensee to provide a credit service; and
(b) in the course of providing the credit service, receives money on behalf of another person.
98 Obligation for credit service licensees to maintain trust account
Requirement to maintain trust account
(1) The credit service licensee must maintain one more trust accounts (the trust account) in accordance with this section.
Civil penalty: 2,000 penalty units.
Requirements for trust accounts
(2) The trust account must be maintained with an Australian ADI (within the meaning of section 9 of the Corporations Act 2001).
(3) The trust account must be designated as the credit service licensee’s trust account.
Offence
(4) The credit service licensee commits an offence if:
(a) the credit service licensee is subject to a requirement under subsection (1); and
(b) the credit service licensee engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.
99 Obligations in relation to trust account money
Requirement to pay money to credit of trust account
(1) The credit service licensee must pay to the credit of the trust account any money received by the credit service licensee on behalf of another person in relation to the credit service provided by the licensee.
Civil penalty: 2,000 penalty units.
Requirement in relation to withdrawal of money from trust account
(2) The credit service licensee must not withdraw any money paid into the trust account, other than for the purpose of paying the money in accordance with subsection (3).
Civil penalty: 2,000 penalty units.
Requirement in relation to payment of money from trust account
(3) The credit service licensee must pay any money withdrawn from the trust account to the person or persons lawfully entitled to receive that money.
Civil penalty: 2,000 penalty units.
Offence
(4) The credit service licensee commits an offence if:
(a) the credit service licensee is subject to a requirement under subsection (1), (2) or (3); and
(b) the credit service licensee engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.
Trust account money not available for payment of debts etc.
(5) Money paid into a trust account by the credit service licensee under this section:
(a) is not available for the payment of a debt of any other creditor of the credit service licensee; and
(b) is not liable to be attached or taken in execution under the order or process of a court at the instance of any such creditors.
100 Obligation to lodge trust account statement and trust account audit report
Requirement to prepare and lodge trust account statement
(1) The credit service licensee must, for each financial year of the credit service licensee:
(a) prepare a written statement in relation to the trust account (the trust account statement) in accordance with this section; and
(b) lodge the trust account statement with ASIC in accordance with this section.
Civil penalty: 2,000 penalty units.
Requirement to prepare and lodge trust account audit report
(2) The credit service licensee must, with the trust account statement, lodge with ASIC an auditor’s report (the trust account audit report) in accordance with this section.
Civil penalty: 2,000 penalty units.
Requirements for statement and audit report
(3) Each of the trust account statement and trust account audit report must:
(a) be in the approved form; and
(b) contain the information and matters prescribed by the regulations; and
(c) be lodged with ASIC in accordance with section 101.
(4) The trust account audit report must be prepared by a person who complies with any eligibility requirements prescribed by the regulations.
Offence
(5) The credit service licensee commits an offence if:
(a) the credit service licensee is subject to a requirement under subsection (1) or (2); and
(b) the credit service licensee engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 200 penalty units, or 5 years imprisonment, or both.
Meaning of financial year
(6) A financial year of the credit service licensee means:
(a) if the credit service licensee is not a body corporate—a year ending on 30 June; and
(b) if the credit service licensee is a body corporate—a financial year of the body corporate (within the meaning of section 323D of the Corporations Act 2001).
101 Time of lodgment of trust account statement and trust account audit report
(1) Unless an extension is granted under subsection (3), the trust account statement and trust account audit report must be lodged with ASIC before the day that is 3 months after the end of the financial year of the credit service licensee to which they relate.
(2) If an extension is granted under subsection (3), the trust account statement and trust account audit report must be lodged with ASIC before the end of the extended period.
(3) ASIC may, on application made:
(a) by the credit service licensee and the auditor that is to prepare the trust account audit report; and
(b) before the end of the period that would otherwise apply;
approve an extension of the period for lodging the trust account statement and trust account audit report. The extension may be of the period originally applicable or the period applicable under a previous extension.
(4) An approval may be given subject to any conditions imposed by ASIC.
(5) If an approval is given subject to conditions, the licensee must comply with those conditions.
Division 4—Matters relating to audit reports
102 Auditor’s right of access to records, information etc.
Auditor is entitled to access and assistance etc. from licensee
(1) An auditor (the auditor) who prepares one of the following audit reports (the audit report):
(a) an audit report required under subsection 49(3) in relation to a licensee;
(b) a trust account audit report required under subsection 100(2) in relation to a licensee;
has a right of access at all reasonable times to the financial records or other credit books of the licensee for purposes relating to the audit report.
(2) The auditor is entitled to require:
(a) from the licensee; or
(b) if the licensee is a body corporate—from any director, secretary or senior manager of the licensee;
any assistance and explanations that the auditor desires for purposes relating to the audit report.
Requirement to give auditor access and assistance etc.
(3) The licensee, or a director, secretary or senior manager of the licensee if it is a body corporate, must not:
(a) refuse or fail to allow the auditor access, in accordance with subsection (1), to financial records or other credit books of the licensee; or
(b) refuse or fail to give assistance, or an explanation, to the auditor as and when required under subsection (2); or
(c) otherwise hinder, obstruct or delay the auditor in the performance or exercise of the auditor’s duties or powers.
Civil penalty: 2,000 penalty units.
Offence
(4) A person commits an offence if:
(a) the person is subject to a requirement under subsection (3); and
(b) the person engages in conduct; and
(c) the person’s conduct contravenes the requirement.
Criminal penalty: 100 penalty units, or 2 years imprisonment, or both.
103 Auditor’s fees and expenses
(1) The reasonable fees and expenses of the auditor for preparing the audit report are payable by the licensee.
(2) The auditor may recover those fees by action against the licensee.
104 Auditor to report on certain matters
Requirement for auditor to disclose maters
(1) If the auditor, in the performance of duties relating to the audit report, becomes aware of a matter referred to in subsection (2), the auditor must, within 7 days after becoming aware of the matter:
(a) lodge a written report on the matter with ASIC; and
(b) give a copy of the report to the licensee.
Civil penalty: 2,000 penalty units.
Matters that must be disclosed
(2) A report must be given in relation to any matter that, in the opinion of the auditor:
(a) has adversely affected, is adversely affecting or may adversely affect the ability of the licensee to meet the licensee’s obligations as a licensee; or
(b) constitutes or may constitute a contravention of:
(i) Division 2 or 3 (or regulations made under those Divisions); or
(ii) a condition of the licensee’s licence; or
(c) constitutes an attempt to unduly influence, coerce, manipulate or mislead the auditor in the preparation of the audit report.
Offence
(3) The auditor commits an offence if:
(a) the auditor is subject to a requirement under subsection (1); and
(b) the auditor engages in conduct; and
(c) the auditor’s conduct contravenes the requirement.
Criminal penalty: 50 penalty units, or 1 year imprisonment, or both.
105 Qualified privilege for auditor etc.
Qualified privilege for auditor
(1) The auditor has qualified privilege in relation to:
(a) a statement that the auditor makes, orally or in writing, in the course of its duties relating to the audit report; or
(b) the lodging of a report with ASIC under subsection 104(1); or
(c) the giving of a report to the licensee under subsection 104(1).
Note: If the auditor is a company, the company has qualified privilege under this subsection in relation to statements made, and reports lodged or sent, by natural persons on behalf of the company if those statements and notices can be properly attributed to the company.
Qualified privilege for registered company auditor acting on behalf of company
(2) If the auditor is a company registered under the Corporations Act 2001, a registered company auditor acting on behalf of the company has qualified privilege in relation to:
(a) a statement that the registered company auditor makes (orally or in writing) in the course of the performance, on behalf of the company, of the company’s duties relating to the audit report; or
(b) the lodging by the registered company auditor, on behalf of the company, of a report with ASIC under subsection 104(1); or
(c) the giving by the registered company auditor, on behalf of the company, of a report to the licensee under subsection 104(1).
Qualified privilege for subsequent publication
(3) A person has qualified privilege in relation to the publishing of a document prepared by the auditor in the course of the auditor’s duties relating to the audit report.
(4) A person has qualified privilege in relation to the publishing of a statement:
(a) made by the auditor as referred to in subsection (1); or
(b) made by a registered company auditor as referred to in subsection (2).
106 Regulations in relation to audit reports etc.
The regulations may make provision in relation to:
(a) the audit reports referred to in subsection 102(1); and
(b) audit reports that persons who have applied for a licence may be requested to lodge under subsection 37(4); and
(c) the auditors that prepare those reports; and
(d) auditing standards that must be complied with in relation to those reports.
Part 2‑6—Exemptions and modifications relating to this Chapter
Division 1—Introduction
107 Guide to this Part
This Part is about exemptions from, and modifications of, the provisions of this Chapter.
Division 2 deals with how exemptions and modifications may be made by ASIC or by the regulations.
Division 2—Exemptions and modifications relating to this Chapter
108 Provisions to which this Part applies
The provisions to which this Part applies are:
(a) this Chapter; and
(b) definitions in this Act, as they apply to references in this Chapter; and
(c) instruments made for the purposes of this Chapter.
109 Exemptions and modifications by ASIC
Exemptions and modifications
(1) ASIC may:
(a) exempt:
(i) a person; or
(ii) a person and all of the person’s credit representatives;
from all or specified provisions to which this Part applies; or
(b) exempt a credit activity that is engaged in in relation to a specified credit contract, mortgage, guarantee or consumer lease from all or specified provisions to which this Part applies; or
(c) declare that provisions to which this Part applies apply in relation to a person, or a credit activity referred to in paragraph (1)(b), as if specified provisions were omitted, modified or varied as specified in the declaration.
(2) An exemption or declaration under subsection (1) is not a legislative instrument.
(3) ASIC may, by legislative instrument:
(a) exempt a class of persons from all or specified provisions to which this Part applies; or
(b) exempt a credit activity (other than a credit activity referred to in paragraph (1)(b)) from all or specified provisions to which this Part applies; or
(c) exempt a class of credit activities from all or specified provisions to which this Part applies; or
(d) declare that provisions to which this Part applies apply in relation to a credit activity (other than a credit activity referred to in paragraph (1)(b)), or a class of persons or credit activities, as if specified provisions were omitted, modified or varied as specified in the declaration.
Conditions on exemptions
(4) An exemption may apply unconditionally or subject to specified conditions. A person to whom a condition specified in an exemption applies must comply with the condition. The court may order the person to comply with the condition in a specified way. Only ASIC may apply to the court for the order.
Publication of exemptions and declarations
(5) An exemption or declaration under subsection (1) must be in writing and ASIC must publish notice of it on its website.
Special rules in relation to offences
(6) If conduct (including an omission) of a person would not have constituted an offence if a particular declaration under paragraph (1)(c) or (3)(d) had not been made, that conduct does not constitute an offence unless, before the conduct occurred:
(a) the text of the declaration was published by ASIC on its website; or
(b) ASIC gave written notice setting out the text of the declaration to the person;
(in addition to complying with the requirements of the Legislative Instruments Act 2003 if the declaration is made under subsection (3)).
(7) In a prosecution for an offence to which subsection (6) applies, the prosecution must prove that paragraph (6)(a) or (b) was complied with before the conduct occurred.
110 Exemptions and modifications by the regulations
The regulations may:
(a) exempt a person or class of persons from all or specified provisions to which this Part applies; or
(b) exempt a credit activity or a class of credit activities from all or specified provisions to which this Part applies; or
(c) provide that the provisions to which this Part applies apply as if specified provisions were omitted, modified or varied as specified in the regulations.
Chapter 3—Responsible lending conduct
Part 3‑1—Licensees that provide credit assistance in relation to credit contracts
Division 1—Introduction
111 Guide to this Part
This Part has rules that apply to licensees that provide credit assistance in relation to credit contracts. These rules are aimed at better informing consumers and preventing them from being in unsuitable credit contracts. However, these rules do not apply to a licensee that will be the credit provider under the credit contract.
Division 2 requires a licensee to give its credit guide to a consumer. The credit guide has information about the licensee and some of the licensee’s obligations under this Act.
Division 3 requires a licensee to give a quote before providing credit assistance to a consumer. The quote must set out the maximum amount the consumer will be required to pay to the licensee. The licensee must not charge more than that amount.
Division 4 requires a licensee, before providing credit assistance to a consumer in relation to a credit contract, to make a preliminary assessment as to whether the contract will be unsuitable for the consumer. To do this, the licensee must make inquiries and verifications about the consumer’s requirements, objectives and financial situation. The licensee must give the consumer a copy of the assessment if requested.
Division 5 requires a licensee, when providing credit assistance to a consumer in relation to a credit contract, to give the consumer a document that discloses certain information (for example, the commission the licensee is likely to receive).
Division 6 prohibits a licensee from providing credit assistance to a consumer in relation to a credit contract if the contract will be unsuitable for the consumer.
Division 7 prohibits a licensee from providing credit assistance to a consumer in relation to short‑term credit contracts. It also imposes requirements on a licensee who makes representations about providing credit assistance in relation to small amount credit contracts.
112 Application of this Part
This Part does not apply in relation to credit assistance provided by a licensee in relation to a credit contract if the licensee is or will be the credit provider under the contract.
Division 2—Credit guide of credit assistance providers
113 Credit guide of credit assistance providers
Requirement to give credit guide
(1) A licensee must, as soon as practicable after it becomes apparent to the licensee that it is likely to provide credit assistance to a consumer in relation to a credit contract, give the consumer the licensee’s credit guide in accordance with subsection (2).
Civil penalty: 2,000 penalty units.
(2) The licensee’s credit guide must:
(a) be in writing; and
(b) be in the form (if any) prescribed by the regulations; and
(c) specify the licensee’s name and contact details; and
(d) specify the licensee’s Australian credit licence number; and
(e) give information about:
(i) any fees that are payable by a consumer to the licensee for the licensee’s credit assistance; and
(ii) any charges that are payable by a consumer to the licensee for matters associated with providing the credit assistance; and
(iii) the method for working out the amount of the fees and charges; and
(f) give information about:
(i) if there are 6 or fewer credit providers that the licensee conducts business with when providing credit assistance in relation to credit contracts—the names of those credit providers; and
(ii) if there are more than 6 credit providers that the licensee conducts business with when providing credit assistance in relation to credit contracts—the names of the 6 credit providers with whom the licensee reasonably believes it conducts the most business; and
(g) give information about:
(i) any commissions that the licensee, or an employee, director or credit representative of the licensee, is likely to receive, directly or indirectly, from credit providers in relation to credit contracts for which the licensee has provided credit assistance; and
(ii) a reasonable estimate of the amounts of those commissions or the range of those amounts; and
(iii) the method for working out those amounts; and
(h) give information about the licensee’s procedure for resolving disputes with a consumer, including contact details for a consumer to access:
(i) the licensee’s internal dispute resolution procedure; and
(ii) the approved external dispute resolution scheme of which the licensee is a member; and
(i) give information about the licensee’s obligations under sections 120 and 123; and
(j) comply with any other requirements prescribed by the regulations.
(3) The regulations may prescribe:
(a) information that need not be included in the credit guide, despite subsection (2); and
(b) for the purposes of paragraph (2)(g):
(i) the method for working out amounts of commissions; and
(ii) how commissions or amounts of commissions must be described.
Manner of giving credit guide
(4) The licensee must give the consumer the licensee’s credit guide in the manner (if any) prescribed by the regulations.
Strict liability offence
(5) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units.
(6) Subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Division 3—Quote for providing credit assistance etc. in relation to credit contracts
114 Quote for providing credit assistance etc.
Requirement to give quote
(1) A licensee must not provide credit assistance to a consumer by:
(a) suggesting that the consumer apply, or assisting the consumer to apply, for a particular credit contract with a particular credit provider; or
(b) suggesting that the consumer apply, or assisting the consumer to apply, for an increase to the credit limit of a particular credit contract with a particular credit provider; or
(c) suggesting that the consumer remain in a particular credit contract with a particular credit provider;
unless:
(d) the licensee has given the consumer a quote in accordance with subsection (2); and
(e) the consumer has signed and dated that quote or otherwise indicated the consumer’s acceptance of it (and the day that happens) in the manner (if any) prescribed by the regulations; and
(f) the licensee has given the consumer a copy of the accepted quote.
Civil penalty: 2,000 penalty units.
(2) The quote must:
(a) be in writing; and
(b) give information about the credit assistance and other services that the quote covers; and
(c) specify the maximum amount that will be payable by the consumer to the licensee in relation to the licensee’s credit assistance and other services; and
(d) give information about what that amount relates to, including:
(i) the maximum amount of the licensee’s fee for providing the credit assistance and other services; and
(ii) the maximum amount of charges that will be incurred by the licensee for matters associated with providing the credit assistance and other services; and
(iii) the maximum amount of fees or charges that will be payable by the licensee to another person on the consumer’s behalf; and
(e) state whether the maximum amount or any other amount will be payable by the consumer to the licensee if a credit contract is not entered or a credit limit is not increased; and
(f) comply with any other requirements prescribed by the regulations.
Manner of giving quote
(3) The licensee must give the quote to the consumer in the manner (if any) prescribed by the regulations.
No demanding payment of amount exceeding quoted amount
(4) The licensee must not request or demand payment of an amount that exceeds the maximum amount set out in the quote.
Civil penalty: 2,000 penalty units.
No demanding payment before credit assistance provided
(5) The licensee must not request or demand payment of an amount for the licensee’s credit assistance before the licensee provides the assistance.
Civil penalty: 2,000 penalty units.
Caveats
(6) The licensee must not lodge, or threaten to lodge, a caveat in relation to land to induce the consumer to pay an amount to the licensee for the licensee’s credit assistance or other services.
Civil penalty: 2,000 penalty units.
Division 4—Obligations of credit assistance providers before providing credit assistance for credit contracts
115 Obligations of credit assistance providers before providing credit assistance for credit contracts
(1) A licensee must not provide credit assistance to a consumer on a day (the assistance day) by:
(a) suggesting that the consumer apply, or assisting the consumer to apply, for a particular credit contract with a particular credit provider; or
(b) suggesting that the consumer apply, or assisting the consumer to apply, for an increase to the credit limit of a particular credit contract with a particular credit provider;
unless the licensee has, within 90 days (or other period prescribed by the regulations) before the assistance day:
(c) made a preliminary assessment that:
(i) is in accordance with subsection 116(1); and
(ii) covers the period proposed for the entering of the contract or the increase of the credit limit; and
(d) made the inquiries and verification in accordance with section 117.
Civil penalty: 2,000 penalty units.
(2) A licensee must not provide credit assistance to a consumer on a day (the assistance day) by suggesting that the consumer remain in a particular credit contract with a particular credit provider unless the licensee has, within 90 days (or other period prescribed by the regulations) before the assistance day:
(a) made a preliminary assessment that:
(i) is in accordance with subsection 116(2); and
(ii) covers a period in which the assistance day occurs; and
(b) made the inquiries and verification in accordance with section 117.
Civil penalty: 2,000 penalty units.
116 Preliminary assessment of unsuitability of the credit contract
(1) For the purposes of paragraph 115(1)(c), the licensee must make a preliminary assessment that:
(a) specifies the period the assessment covers; and
(b) assesses whether the credit contract will be unsuitable for the consumer if the contract is entered or the credit limit is increased in that period.
(2) For the purposes of paragraph 115(2)(a), the licensee must make a preliminary assessment that:
(a) specifies the period the assessment covers; and
(b) assesses whether the credit contract will be unsuitable for the consumer if the consumer remains in the contract in that period.
Note: The licensee is not required to make a preliminary assessment under this section if the credit assistance is not provided.
117 Reasonable inquiries etc. about the consumer
(1) For the purposes of paragraph 115(1)(d) or 115(2)(b), the licensee must, before making the preliminary assessment:
(a) make reasonable inquiries about the consumer’s requirements and objectives in relation to the credit contract; and
(b) make reasonable inquiries about the consumer’s financial situation; and
(c) take reasonable steps to verify the consumer’s financial situation; and
(d) make any inquiries prescribed by the regulations about any matter prescribed by the regulations; and
(e) take any steps prescribed by the regulations to verify any matter prescribed by the regulations.
Civil penalty: 2,000 penalty units.
(1A) If:
(a) the credit contract is a small amount credit contract; and
(b) the consumer holds (whether alone or jointly with another person) an account with an ADI into which income payable to the consumer is credited;
the licensee must, in verifying the consumer’s financial situation for the purposes of paragraph 115(1)(d), obtain and consider account statements that cover at least the immediately preceding period of 90 days.
(1B) Subsection (1A) does not limit paragraph (1)(c) of this section.
(2) The regulations may prescribe particular inquiries or steps that must be made or taken, or do not need to be made or taken, for the purposes of paragraph (1)(a), (b) or (c).
118 When the credit contract must be assessed as unsuitable—entering contract or increasing the credit limit
Requirement to assess the contract as unsuitable
(1) For a preliminary assessment under subsection 116(1) about entering a credit contract or increasing a credit limit of a credit contract, the licensee must assess that the contract will be unsuitable for the consumer if the contract will be unsuitable for the consumer under subsection (2).
Civil penalty: 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.
(3A) If the contract is a small amount credit contract (the relevant contract) and either of the following apply:
(a) at the time of the preliminary assessment:
(i) the consumer is a debtor under another small amount credit contract; and
(ii) the consumer is in default in payment of an amount under that other contract;
(b) in the 90‑day period before the time of the preliminary assessment, the consumer has been a debtor under 2 or more other small amount credit contracts;
then, for the purposes of paragraph (2)(a), it is presumed that the consumer could only comply with the consumer’s financial obligations under the relevant contract with substantial hardship, unless the contrary is proved.
Information to be used to determine if contract will be unsuitable
(4) For the purposes of determining under subsection (2) whether the contract will be unsuitable, only information that satisfies both of the following paragraphs is to be taken into account:
(a) the information is about the consumer’s financial situation, requirements or objectives, or any other matter prescribed by the regulations under paragraph 117(1)(d) or (e);
(b) at the time of the preliminary assessment:
(i) the licensee had reason to believe that the information was true; or
(ii) the licensee would have had reason to believe that the information was true if the licensee had made the inquiries or verification under section 117.
119 When the credit contract must be assessed as unsuitable—remaining in credit contract
Requirement to assess the contract as unsuitable
(1) For a preliminary assessment under subsection 116(2) about remaining in a credit contract, the licensee must assess that the contract will be unsuitable for the consumer if the contract will be unsuitable for the consumer under subsection (2).
Civil penalty: 2,000 penalty units.
Note: Even if the contract will not be unsuitable for the consumer under subsection (2), the licensee may still assess that the contract will be unsuitable for other reasons.
Particular circumstances when the contract will be unsuitable
(2) The contract will be unsuitable for the consumer if, at the time of the preliminary assessment, it is likely that:
(a) the consumer will be unable to comply with the consumer’s financial obligations under the contract, or could only comply with substantial hardship, if the consumer remains in the contract in the period covered by the preliminary assessment; or
(b) the contract will not meet the consumer’s requirements or objectives if the consumer remains in the contract in the period covered by the preliminary assessment; or
(c) if the regulations prescribe circumstances in which a credit contract is unsuitable—those circumstances will apply to the contract if the consumer remains in the contract in the period covered by the preliminary assessment.
(3) For the purposes of paragraph (2)(a), it is presumed that, if the consumer could only comply with the consumer’s financial obligations under the contract by selling the consumer’s principal place of residence, the consumer could only comply with those obligations with substantial hardship, unless the contrary is proved.
Information to be used to determine if contract will be unsuitable
(4) For the purposes of determining under subsection (2) whether the contract will be unsuitable, only information that satisfies both of the following paragraphs is to be taken into account:
(a) the information is about the consumer’s financial situation, requirements or objectives, or any other matter prescribed by the regulations under paragraph 117(1)(d) or (e);
(b) at the time of the preliminary assessment:
(i) the licensee had reason to believe that the information was true; or
(ii) the licensee would have had reason to believe that the information was true if the licensee had made the inquiries or verification under section 117.
120 Providing the consumer with the preliminary assessment
Requirement to give assessment if requested
(1) If the consumer requests the licensee for a copy of the preliminary assessment within 7 years of the date of the credit assistance quote under section 114, the licensee must give the consumer a written copy of the assessment:
(a) if the request is made within 2 years of the quote—before the end of 7 business days after the day the licensee receives the request; and
(b) otherwise—before the end of 21 business days after the day the licensee receives the request.
Note: The licensee is not required to give the consumer a copy of the preliminary assessment if the licensee does not provide credit assistance to the consumer.
Civil penalty: 2,000 penalty units.
Manner of giving assessment
(2) The licensee must give the consumer the copy of the assessment in the manner (if any) prescribed by the regulations.
No payment for assessment
(3) The licensee must not request or demand payment of an amount for giving the consumer a copy of the preliminary assessment.
Civil penalty: 2,000 penalty units.
Strict liability offence
(4) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1) or (3); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units.
(5) Subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Division 5—Fees, commissions etc. relating to credit contracts
121 Fees, commissions etc. relating to credit contracts
Requirement for disclosure
(1) A licensee must, at the same time as providing credit assistance to a consumer by:
(a) suggesting that the consumer apply, or assisting the consumer to apply, for a particular credit contract with a particular credit provider; or
(b) suggesting that the consumer apply, or assisting the consumer to apply, for an increase to the credit limit of a particular credit contract with a particular credit provider; or
(c) suggesting that the consumer remain in a particular credit contract with a particular credit provider;
give the consumer a credit proposal disclosure document in accordance with subsection (2).
Civil penalty: 2,000 penalty units.
(2) The credit proposal disclosure document must contain the following:
(a) the total amount of any fees or charges that the consumer is liable to pay to the licensee in relation to the credit contract and the method used for working out that amount;
(b) a reasonable estimate of the total amount of any commissions that the licensee, or an employee, director or credit representative of the licensee, is likely to receive in relation to the credit contract and the method used for working out that amount;
(c) a reasonable estimate of the total amount of any fees or charges that the consumer is likely to be liable to pay to the credit provider in relation to applying for the credit contract;
(d) a reasonable estimate of the total amount of any fees or charges that the consumer is likely to be liable to pay to any other person in relation to applying for the credit contract;
(e) if the credit is to be applied to pay any of the amounts in the above paragraphs—a reasonable estimate of the likely amount of credit that will be available to the consumer after payments under paragraphs (a), (c) and (d) are made.
(3) For the purposes of paragraph (2)(b), the regulations may prescribe:
(a) the method for working out amounts of commissions; and
(b) how amounts of commissions must be described.
Manner of giving credit proposal disclosure document
(4) The licensee must give the credit proposal disclosure document to the consumer in the manner (if any) prescribed by the regulations.
122 No profiting from fees etc. paid to third parties
Requirement not to profit
(1) If, in the course of providing credit assistance to a consumer in relation to a credit contract, a licensee pays an amount (the third party amount) to another person on behalf of the consumer, the licensee must not request or demand payment of an amount, as reimbursement for the third party amount, that exceeds the third party amount.
Civil penalty: 2,000 penalty units.
Offence
(2) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.
Division 6—Prohibition on suggesting, or assisting with, unsuitable credit contracts
123 Prohibition on suggesting or assisting consumers to enter, or increase the credit limit under, unsuitable credit contracts
Prohibition on suggesting, or assisting with, unsuitable contracts
(1) A licensee must not provide credit assistance to a consumer by:
(a) suggesting that the consumer apply, or assisting the consumer to apply, for a particular credit contract with a particular credit provider; or
(b) suggesting that the consumer apply, or assisting the consumer to apply, for an increase to the credit limit of a particular credit contract with a particular credit provider;
if the contract will be unsuitable for the consumer under subsection (2).
Civil penalty: 2,000 penalty units.
When the contract will be unsuitable
(2) The contract will be unsuitable for the consumer if, at the time the licensee provides the credit assistance, it is likely that:
(a) the consumer will be unable to comply with the consumer’s financial obligations under the contract, or could only comply with substantial hardship; or
(b) the contract will not meet the consumer’s requirements or objectives; or
(c) if the regulations prescribe circumstances in which a credit contract is unsuitable—those circumstances will apply to the contract;
if the contract is entered in the period proposed for it to be entered or the credit limit is increased in the period proposed for it to be increased.
(3) For the purposes of paragraph (2)(a), it is presumed that, if the consumer could only comply with the consumer’s financial obligations under the contract by selling the consumer’s principal place of residence, the consumer could only comply with those obligations with substantial hardship, unless the contrary is proved.
(3A) If the contract is a small amount credit contract (the relevant contract) and either of the following apply:
(a) at the time the licensee provides the credit assistance:
(i) the consumer is a debtor under another small amount credit contract; and
(ii) the consumer is in default in payment of an amount under that other contract;
(b) in the 90‑day period before the time the licensee provides the credit assistance, the consumer has been a debtor under 2 or more other small amount credit contracts;
then, for the purposes of paragraph (2)(a), it is presumed that the consumer could only comply with the consumer’s financial obligations under the relevant contract 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).
Division 7—Special rules for short‑term and small amount credit contracts
124A Prohibition on providing credit assistance in relation to short‑term credit contracts
Prohibition
(1) A licensee must not provide credit assistance to a consumer by:
(a) suggesting that the consumer apply, or assisting the consumer to apply, for a short‑term credit contract; or
(b) suggesting that the consumer apply, or assisting the consumer to apply, for an increase to the credit limit of a particular short‑term credit contract with a particular credit provider.
Civil penalty: 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.
124B Licensee who makes representations about credit assistance in relation to small amount credit contracts must display information etc.
Requirement
(1) If a licensee represents that the licensee provides, or is able to provide, credit assistance to consumers in relation to small amount credit contracts:
(a) the licensee must display information in accordance with the regulations at a place prescribed by the regulations; and
(b) the licensee must ensure that any website of the licensee complies with the 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: 50 penalty units.
Part 3‑2—Licensees that are credit providers under credit contracts: general rules
Division 1—Introduction
125 Guide to this Part
This Part has rules that apply to licensees that are credit providers. These rules are aimed at better informing consumers and preventing them from being in unsuitable credit contracts.
Division 2 requires a licensee to give its credit guide to a consumer. The credit guide has information about the licensee and some of the licensee’s obligations under this Act.
Division 3 requires a licensee, before doing particular things (such as entering a credit contract), to make an assessment as to whether the contract will be unsuitable. To do this, the licensee must make inquiries and verifications about the consumer’s requirements, objectives and financial situation. The licensee must give the consumer a copy of the assessment if requested.
Division 4 prohibits a licensee from entering or increasing the credit limit of a credit contract that is unsuitable for a consumer.
Division 2—Credit guide of credit providers
126 Credit guide of credit providers
Requirement to give credit guide
(1) A licensee must, as soon as practicable after it becomes apparent to the licensee that it is likely to enter a credit contract with a consumer who will be the debtor under the contract, give the consumer the licensee’s credit guide in accordance with subsection (2).
Civil penalty: 2,000 penalty units.
(2) The licensee’s credit guide must:
(a) be in writing; and
(b) be in the form (if any) prescribed by the regulations; and
(c) specify the licensee’s name and contact details; and
(d) specify the licensee’s Australian credit licence number; and
(e) give information about the licensee’s procedure for resolving disputes with a consumer, including contact details for a consumer to access:
(i) the licensee’s internal dispute resolution procedure; and
(ii) the approved external dispute resolution scheme of which the licensee is a member; and
(f) give information about the licensee’s obligations under sections 132 and 133; and
(g) comply with any other requirements prescribed by the regulations.
(3) The regulations may prescribe information that need not be included in the credit guide, despite subsection (2).
Manner of giving credit guide
(4) The licensee must give the consumer the licensee’s credit guide in the manner (if any) prescribed by the regulations.
Strict liability offence
(5) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units.
(6) Subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
127 Credit guide of credit providers who are assignees
Requirement to give credit guide
(1) A licensee must, as soon as practicable after it has been assigned any rights or obligations of a credit provider under a credit contract, give the debtor under the contract the licensee’s credit guide in accordance with subsection (2).
Civil penalty: 2,000 penalty units.
(2) The licensee’s credit guide must:
(a) be in writing; and
(b) be in the form (if any) prescribed by the regulations; and
(c) specify the licensee’s name and contact details; and
(d) specify the licensee’s Australian credit licence number; and
(e) give information about the licensee’s procedure for resolving disputes with a consumer, including contact details for a consumer to access:
(i) the licensee’s internal dispute resolution procedure; and
(ii) the approved external dispute resolution scheme of which the licensee is a member; and
(f) comply with any other requirements prescribed by the regulations.
(3) The regulations may prescribe information that need not be included in the credit guide, despite subsection (2).
Manner of giving credit guide
(4) The licensee must give the consumer the licensee’s credit guide in the manner (if any) prescribed by the regulations.
Strict liability offence
(5) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units.
(6) Subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Division 3—Obligation to assess unsuitability
128 Obligation to assess unsuitability
A licensee must not:
(a) enter a credit contract with a consumer who will be the debtor under the contract; or
(aa) make an unconditional representation to a consumer that the licensee considers that the consumer is eligible to enter a credit contract with the licensee; or
(b) increase the credit limit of a credit contract with a consumer who is the debtor under the contract; or
(ba) make an unconditional representation to a consumer that the licensee considers that the credit limit of credit contract between the consumer and the licensee will be able to be increased;
on a day (the credit day) unless the licensee has, within 90 days (or other period prescribed by the regulations) before the credit day:
(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(c), the licensee must make an assessment that:
(a) specifies the period the assessment covers; and
(b) assesses whether the credit contract will be unsuitable for the consumer if the contract is entered or the credit limit is increased in that period.
Note: The licensee is not required to make the assessment under this section if the contract is not entered or the credit limit is not increased.
130 Reasonable inquiries etc. about the consumer
Requirement to make inquiries and take steps to verify
(1) For the purposes of paragraph 128(d), the licensee must, before making the assessment:
(a) make reasonable inquiries about the consumer’s requirements and objectives in relation to the credit contract; and
(b) make reasonable inquiries about the consumer’s financial situation; and
(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.
(1A) If:
(a) the credit contract is a small amount credit contract; and
(b) the consumer holds (whether alone or jointly with another person) an account with an ADI into which income payable to the consumer is credited;
the licensee must, in verifying the consumer’s financial situation for the purposes of paragraph 128(d), obtain and consider account statements that cover at least the immediately preceding period of 90 days.
(1B) Subsection (1A) does not limit paragraph (1)(c) of this section.
(2) The regulations may prescribe particular inquiries or steps that must be made or taken, or do not need to be made or taken, for the purposes of paragraph (1)(a), (b) or (c).
131 When credit contract must be assessed as unsuitable
Requirement to assess the contract as unsuitable
(1) The licensee must assess that the credit contract will be unsuitable for the consumer if the contract will be unsuitable for the consumer under subsection (2).
Civil penalty: 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 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.
(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.
(3A) If the contract is a small amount credit contract (the relevant contract) and either of the following apply:
(a) at the time of the assessment:
(i) the consumer is a debtor under another small amount credit contract; and
(ii) the consumer is in default in payment of an amount under that other contract;
(b) in the 90‑day period before the time of the assessment, the consumer has been a debtor under 2 or more other small amount credit contracts;
then, for the purposes of paragraph (2)(a), it is presumed that the consumer could only comply with the consumer’s financial obligations under the relevant contract with substantial hardship, unless the contrary is proved.
Information to be used to determine if contract will be unsuitable
(4) For the purposes of determining under subsection (2) whether the contract will be unsuitable, only information that satisfies both of the following paragraphs is to be taken into account:
(a) the information is about the consumer’s financial situation, requirements or objectives, or any other matter prescribed by the regulations under paragraph 130(1)(d) or (e);
(b) at the time of the assessment:
(i) the licensee had reason to believe that the information was true; or
(ii) the licensee would have had reason to believe that the information was true if the licensee had made the inquiries or verification under section 130.
132 Giving the consumer the assessment
Requirement to give assessment if requested
(1) If, before entering the credit contract or increasing the credit limit, the consumer requests the licensee for a copy of the assessment, the licensee must give the consumer a written copy of the assessment before entering the contract or increasing the credit limit.
Note: The licensee is not required to give the consumer a copy of the assessment if the contract is not entered or the credit limit is not increased.
Civil penalty: 2,000 penalty units.
(2) If, during the period that:
(a) starts on the day (the credit day) the credit contract is entered or the credit limit is increased; and
(b) ends 7 years after that day;
the consumer requests the licensee for a copy of the assessment, the licensee must give the consumer a written copy of the assessment:
(c) if the request is made within 2 years of the credit day—before the end of 7 business days after the day the licensee receives the request; and
(d) otherwise—before the end of 21 business days after the day the licensee receives the request.
Civil penalty: 2,000 penalty units.
Manner of giving assessment
(3) The licensee must give the consumer the copy of the assessment in the manner (if any) prescribed by the regulations.
No payment for assessment
(4) The licensee must not request or demand payment of an amount for giving the consumer a copy of the assessment.
Civil penalty: 2,000 penalty units.
Strict liability offence
(5) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1), (2) or (4); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units.
(6) Subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Division 4—Prohibition on entering, or increasing the credit limit of, unsuitable credit contracts
133 Prohibition on entering, or increasing the credit limit of, unsuitable credit contracts
Prohibition on entering etc. unsuitable contracts
(1) A licensee must not:
(a) enter a credit contract with a consumer who will be the debtor under the contract; or
(b) increase the credit limit of a credit contract with a consumer who is the debtor under the contract;
if the contract is unsuitable for the consumer under subsection (2).
Civil penalty: 2,000 penalty units.
When the contract is unsuitable
(2) The contract is unsuitable for the consumer if, at the time it is entered or the credit limit is increased:
(a) it is likely that the consumer will be unable to comply with the consumer’s financial obligations under the contract, or could only comply with substantial hardship; or
(b) the contract does not meet the consumer’s requirements or objectives; or
(c) if the regulations prescribe circumstances in which a credit contract is unsuitable—those circumstances apply to the contract.
(3) For the purposes of paragraph (2)(a), it is presumed that, if the consumer could only comply with the consumer’s financial obligations under the contract by selling the consumer’s principal place of residence, the consumer could only comply with those obligations with substantial hardship, unless the contrary is proved.
(3A) If the contract is a small amount credit contract (the relevant contract) and either of the following apply:
(a) at the time it is entered or the credit limit is increased:
(i) the consumer is a debtor under another small amount credit contract; and
(ii) the consumer is in default in payment of an amount under that other contract;
(b) in the 90‑day period before the time it is entered or the credit limit is increased, the consumer has been a debtor under 2 or more other small amount credit contracts;
then, for the purposes of paragraph (2)(a), it is presumed that the consumer could only comply with the consumer’s financial obligations under the relevant contract 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.
Note: Sections 178 and 179 provide for remedies for anyone who suffers, or is likely to suffer, loss or damage because of a breach of this section. For example, if a consumer makes an unsuitable credit contract with a licensee, rather than making a not unsuitable credit contract for a reverse mortgage, a person who suffered, or is likely to suffer, loss as a result may be able to get court orders under section 178 or 179 to put the person in a position like the one they would have been in had the consumer entered into the contract for the reverse mortgage.
Part 3‑2A—Licensees that are credit providers under credit contracts: additional rules relating to standard home loans
Division 1—Introduction
133A Guide to this Part
This Part has rules that apply to licensees that are credit providers under standard home loans. It applies in addition to the general rules in Part 3‑2.
Division 2 imposes requirements aimed at ensuring a consumer can obtain a Key Facts Sheet for a standard home loan.
Division 2—Key Facts Sheets for standard home loans
133AA What is a standard home loan?
(1) A standard home loan of a licensee is a standard form of credit contract under which the licensee provides credit:
(a) to purchase residential property; or
(b) to refinance credit that has been provided wholly or predominantly to purchase residential property.
(2) The regulations may make provisions that apply to determining, for the purpose of subsection (1), whether a credit contract is a standard form of credit contract.
133AB What is a Key Facts Sheet for a standard home loan?
(1) A Key Facts Sheet for a standard home loan is a document:
(a) that contains the information relating to the standard home loan that is required by the regulations; and
(b) that complies with any other requirements prescribed by the regulations.
(2) Without limiting paragraph (1)(a), regulations made for the purpose of that paragraph:
(a) may require a Key Facts Sheet for a standard home loan to contain information:
(i) that is specific to the consumer by whom the Key Facts Sheet is to be generated under section 133AC or to whom it is to be provided under section 133AD; and
(ii) that relates to the cost or implications of the loan for the consumer; and
(b) may require information contained in a Key Facts Sheet for a standard home loan to be based on either or both of the following:
(i) information provided by the consumer;
(ii) particular assumptions.
133AC Credit provider’s website to provide capacity to generate Key Facts Sheet
When this section applies
(1) This section applies if a licensee has a website that can be used by a consumer to apply for, or make an inquiry about, one or more standard home loans of the licensee.
Requirement
(2) The licensee must ensure that the website satisfies all of the following paragraphs:
(a) the website tells the consumer that the consumer may use the website to generate a Key Facts Sheet for the standard home loan, or for each of the standard home loans;
(b) the website:
(i) tells the consumer what information the consumer will need to enter in order to generate the Key Facts Sheet or Sheets; and
(ii) provides the consumer with instructions on how to generate the Key Facts Sheet or Sheets;
(c) if the consumer enters the information and follows those instructions, the consumer can use the website to generate the Key Facts Sheet or Sheets, containing up‑to‑date information, in a form that can be printed;
(d) the website complies with any other requirements prescribed by the regulations.
Civil penalty: 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 3‑2B—Licensees that are credit providers under credit contracts: additional rules relating to credit card contracts
Division 1—Introduction
133B Guide to this Part
This Part has rules that apply to licensees that are credit providers under credit card contracts. It applies in addition to the general rules in Part 3‑2.
Division 2 defines key concepts used in this Part (including credit card contract and credit card).
Division 3 imposes requirements aimed at ensuring a consumer obtains a Key Facts Sheet before entering into a credit card contract.
Division 4 imposes restrictions on a licensee making offers etc. to increase the credit limit of a credit card contract.
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 2—Credit card contracts and related concepts
133BA Meaning of credit card contract etc.
Meaning of credit card contract
(1) A credit card contract is a continuing credit contract under which credit is ordinarily obtained only by the use of a credit card.
Meaning of credit card
(2) A credit card is:
(a) a card of a kind commonly known as a credit card; or
(b) a card of a kind that persons carrying on business commonly issue to their customers, or prospective customers, for use in obtaining goods or services from those persons on credit; or
(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 3—Key Facts Sheets for credit card contract
133BB What is a Key Facts Sheet for a credit card contract?
A Key Facts Sheet for a credit card contract is a document:
(a) that contains the information relating to the contract that is required by the regulations; and
(b) that complies with any other requirements prescribed by the regulations.
133BC Application form for credit card contract to include up‑to‑date Key Facts Sheet
Requirement
(1) If a licensee makes available to consumers an application form that can be used to apply for a credit card contract under which the licensee would be the credit provider, the licensee must ensure that the application form includes a Key Facts Sheet for the contract that contains up‑to‑date information.
Civil penalty: 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 4—Offers 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 5—Use of credit card in excess of credit limit
133BH Credit provider to notify consumer of use of credit card in excess of credit limit
Regulations may require licensee to notify consumer of use of credit card in excess of credit limit
(1) The regulations may require a licensee who is the credit provider under a credit card contract to notify the consumer who is the debtor under the contract if the licensee becomes aware that the debtor has used a credit card that is linked to the contract to obtain cash, goods or services in excess of the credit limit for the contract.
(2) Without limiting subsection (1), regulations made for the purpose of that subsection may deal with:
(a) how and when the licensee must notify the consumer; and
(b) the matters that must be included in the notification.
Requirement to comply with the regulations
(3) A licensee must comply with regulations made for the purpose of subsection (1).
Civil penalty: 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 6—Order of application of payments made under credit card contracts
133BO Credit provider to apply payments in accordance with this Division
Requirement
(1) If a payment (the relevant payment) is made under a credit card contract:
(a) by or on behalf of the consumer who is the debtor under the contract; and
(b) to the licensee who is the credit provider under the contract;
the licensee must apply the payment in accordance with this Division (despite any provision to the contrary in the contract, any other contract or instrument or any other law).
Civil penalty: 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 3‑2C—Licensees that are credit providers under credit contracts: additional rules relating to short‑term and small amount credit contracts
Division 1—Introduction
133C Guide to this Part
This Part has rules that apply to licensees who are, or are to be, credit providers under short‑term credit contracts and small amount credit contracts. It applies in addition to the general rules in Part 3‑2.
Division 2 prohibits a licensee from entering into, or increasing the credit limit of, short‑term credit contracts. It also imposes requirements on a licensee who makes representations about entering into small amount credit contracts and prohibits a licensee from entering into, or offering to enter into, small amount credit contracts in certain circumstances.
Division 2—Short‑term and small amount credit contracts
133CA Prohibition on entering, or increasing the credit limit of, short‑term credit contracts
Prohibition
(1) A licensee must not:
(a) enter a short‑term credit contract with a consumer who will be the debtor under the contract; or
(b) increase the credit limit of a short‑term credit contract with a consumer who is the debtor under the contract.
Civil penalty: 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.
133CB Licensee who makes representations about small amount credit contracts must display information etc.
Requirement
(1) If a licensee represents that the licensee enters into, or is able to enter into, small amount credit contracts with consumers under which the licensee would be the credit provider:
(a) the licensee must display information in accordance with the regulations at a place prescribed by the regulations; and
(b) the licensee must ensure that any website of the licensee complies with the 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: 50 penalty units.
133CC Licensee must not enter into a small amount credit contract if the repayments do not meet the prescribed requirements
Requirement
(1) A licensee must not enter into, or offer to enter into, a small amount credit contract with a consumer who will be the debtor under the contract if:
(a) the consumer is included in a class of consumers prescribed by the regulations; and
(b) the repayments that would be required under the contract would not meet the requirements prescribed by the regulations.
Civil penalty: 2,000 penalty units.
Note: For example, the regulations may provide that the amount of a repayment must not exceed a specified percentage of the consumer’s income.
Offence
(2) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units.
Part 3‑2D—Licensees and reverse mortgages
133DA Guide to this Part
This Part has rules that apply to licensees that provide credit services or are credit providers.
Before providing credit assistance, or entering into a credit contract, for a reverse mortgage, licensees must provide projections of the debtor’s equity in the property that may be covered by the reverse mortgage.
Licensees must also make reverse mortgage information statements available on their websites and on request.
Licensees must not inaccurately use terms like “reverse mortgage” in making representations about credit contracts and mortgages.
133DB Giving projections of equity before providing credit assistance or entering credit contract
Requirement to give projections
(1) Before a licensee makes a preliminary assessment for the purposes of paragraph 115(1)(c) or (2)(a), or an assessment for the purposes of paragraph 128(c), in connection with a credit contract with a consumer for a reverse mortgage, the licensee must:
(a) show the consumer in person, or give the consumer in a way prescribed by the regulations, projections that:
(i) relate to the value of the dwelling or land that may become reverse mortgaged property, and the consumer’s indebtedness, over time if the consumer were to enter into a contract for a reverse mortgage; and
(ii) are made in accordance with the regulations by using a website approved by ASIC; and
(b) give the consumer a printed copy of the projections; and
(c) tell the consumer in person the things (if any) that relate to reverse mortgages and are prescribed by the regulations; and
(d) give the consumer a reverse mortgage information statement.
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 person’s conduct breaches the requirement.
Criminal penalty: 50 penalty units.
Defences for not giving projections
(3) For the purposes of paragraphs (1)(a) and (b), and of subsection (2) so far as it relates to either of those paragraphs, it is a defence if the licensee reasonably believes that:
(a) another person has:
(i) shown the consumer in person projections described in paragraph (1)(a); and
(ii) given the consumer a printed copy of the projections; and
(b) the projections are the same, or substantially the same, as those paragraph (1)(a) requires the licensee to show the consumer.
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 paragraphs (1)(a) and (b), and of subsection (2) so far as it relates to either of those paragraphs, it is a defence if the circumstances prescribed by the regulations exist.
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).
Defence for not giving reverse mortgage information statement
(5) For the purposes of paragraph (1)(d), and of subsection (2) so far as it relates to that paragraph, it is a defence if the licensee reasonably believes that another person has given the consumer a reverse mortgage information statement in the last 90 days.
Note: For the purposes of subsection (2), a defendant bears an evidential burden in relation to the matter in subsection (5) (see subsection 13.3(3) of the Criminal Code).
133DC Making reverse mortgage information statement available on website of credit provider or credit assistance provider
When this section applies
(1) This section applies if a licensee:
(a) is:
(i) a person who provides, or holds himself or herself out as able to provide, credit assistance relating to credit contracts for reverse mortgages; or
(ii) a credit provider under one or more credit contracts for a reverse mortgages; and
(b) has a website that provides information about such contracts.
Requirement
(2) The licensee must make available through the website a reverse mortgage information statement.
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 person’s conduct breaches the requirement.
Criminal penalty: 50 penalty units.
133DD Making reverse mortgage information statement available in other situations
When this section applies
(1) This section applies if:
(a) a licensee is:
(i) a person who provides, or holds himself or herself out as able to provide, credit assistance relating to credit contracts for reverse mortgages; or
(ii) a credit provider under one or more credit contracts for reverse mortgages; and
(b) either:
(i) a consumer asks the licensee (otherwise than by using a website of the licensee) for a reverse mortgage information statement; or
(ii) the regulations require a consumer, in circumstances prescribed by the regulations, to be given a reverse mortgage information statement; and
(c) the consumer gives 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, give the consumer a reverse mortgage information statement.
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.
Defences
(4) For the purposes of subsections (2) and (3), it is a defence if:
(a) the licensee has given the consumer, or reasonably believes that someone else has given the consumer, a reverse mortgage information statement; or
(b) the licensee:
(i) is a credit provider under one or more credit contracts for reverse mortgages; and
(ii) reasonably believes that the consumer would not be eligible to make a credit contract with the licensee for a reverse mortgage; or
(c) there exist circumstances prescribed by regulations as circumstances in which the licensee is not required to give the consumer a reverse mortgage information statement.
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).
133DE Representations that use the term “reverse mortgage” etc.
Credit service providers
(1) A licensee must not, in providing or offering to provide a credit service to a consumer, use either of the following terms (either alone or in combination with other words or letters) in a representation to the consumer about an actual or proposed credit contract or mortgage:
(a) the phrase “reverse mortgage”;
(b) another term (whether or not in English) of similar import to the phrase “reverse mortgage”.
Civil penalty: 2,000 penalty units.
Credit providers
(2) A licensee that is a credit provider must not use either of the following terms (either alone or in combination with other words or letters) in a representation to a consumer about an actual or proposed credit contract or mortgage:
(a) the phrase “reverse mortgage”;
(b) another term (whether or not in English) of similar import to the phrase “reverse mortgage”.
Civil penalty: 2,000 penalty units.
Defence
(3) For the purposes of subsections (1) and (2), it is a defence if:
(a) the representation truly represents that a credit contract:
(i) is or will be a credit contract for a reverse mortgage; or
(ii) is not or will not be a credit contract for a reverse mortgage; or
(b) the representation truly represents that a mortgage:
(i) is or will be part of a reverse mortgage; or
(ii) is not or will not be part of a reverse mortgage.
Part 3‑3—Licensees that provide credit assistance in relation to consumer leases
Division 1—Introduction
134 Guide to this Part
This Part has rules that apply to licensees that provide credit assistance in relation to consumer leases. These rules are aimed at better informing consumers and preventing them from being in unsuitable consumer leases. However, these rules do not apply to a licensee that will be the lessor under the consumer lease.
Division 2 requires a licensee to give its credit guide to a consumer. The credit guide has information about the licensee and some of the licensee’s obligations under this Act.
Division 3 requires a licensee to give a quote before providing credit assistance to a consumer. The quote must set out the maximum amount the consumer will be required to pay to the licensee. The licensee must not charge more than that amount.
Division 4 requires a licensee, before providing credit assistance to a consumer in relation to a consumer lease, to make a preliminary assessment as to whether the lease will be unsuitable for the consumer. To do this, the licensee must make inquiries and verifications about the consumer’s requirements, objectives and financial situation. The licensee must give the consumer a copy of the assessment if requested.
Division 5 requires a licensee, when providing credit assistance to a consumer in relation to a consumer lease, to give the consumer a document that discloses certain information (for example, the commission the licensee is likely to receive).
Division 6 prohibits a licensee from providing credit assistance to a consumer in relation to a consumer lease if the lease will be unsuitable for the consumer.
135 Application of this Part
This Part does not apply in relation to credit assistance provided by a licensee in relation to a consumer lease if the licensee is or will be the lessor under the consumer lease.
Division 2—Credit guide of credit assistance providers
136 Credit guide of credit assistance providers
Requirement to give credit guide
(1) A licensee must, as soon as practicable after it becomes apparent to the licensee that it is likely to provide credit assistance to a consumer in relation to a consumer lease, give the consumer the licensee’s credit guide in accordance with subsection (2).
Civil penalty: 2,000 penalty units.
(2) The licensee’s credit guide must:
(a) be in writing; and
(b) be in the form (if any) prescribed by the regulations; and
(c) specify the licensee’s name and contact details; and
(d) specify the licensee’s Australian credit licence number; and
(e) give information about:
(i) any fees that are payable by a consumer to the licensee for the licensee’s credit assistance; and
(ii) any charges that are payable by a consumer to the licensee for matters associated with providing the credit assistance; and
(iii) the method for working out the amount of the fees and charges; and
(f) give information about:
(i) if there are 6 or fewer lessors that the licensee conducts business with when providing credit assistance in relation to consumer leases—the names of those lessors; and
(ii) if there are more than 6 lessors that the licensee conducts business with when providing credit assistance in relation to consumer leases—the names of the 6 lessors with whom the licensee reasonably believes it conducts the most business; and
(g) give information about:
(i) any commissions that the licensee, or an employee, director or credit representative of the licensee, is likely to receive, directly or indirectly, from lessors in relation to consumer leases for which the licensee has provided credit assistance; and
(ii) a reasonable estimate of the amounts of those commissions or the range of those amounts; and
(iii) the method for working out those amounts; and
(h) give information about the licensee’s procedure for resolving disputes with a consumer, including contact details for a consumer to access:
(i) the licensee’s internal dispute resolution procedure; and
(ii) the approved external dispute resolution scheme of which the licensee is a member; and
(i) give information about the licensee’s obligations under sections 143 and 146; and
(j) comply with any other requirements prescribed by the regulations.
(3) The regulations may prescribe:
(a) information that need not be included in the credit guide, despite subsection (2); and
(b) for the purposes of paragraph (2)(g):
(i) the method for working out amounts of commissions; and
(ii) how commissions or amounts of commissions must be described.
Manner of giving credit guide
(4) The licensee must give the consumer the licensee’s credit guide in the manner (if any) prescribed by the regulations.
Strict liability offence
(5) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units.
(6) Subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Division 3—Quote for providing credit assistance etc. in relation to consumer leases
137 Quote for providing credit assistance etc.
Requirement to give quote
(1) A licensee must not provide credit assistance to a consumer by:
(a) suggesting that the consumer apply, or assisting the consumer to apply, for a particular consumer lease with a particular lessor; or
(b) suggesting that the consumer remain in a particular consumer lease with a particular lessor;
unless:
(c) the licensee has given the consumer a quote in accordance with subsection (2); and
(d) the consumer has signed and dated that quote or otherwise indicated the consumer’s acceptance of it (and the day that happens) in the manner (if any) prescribed by the regulations; and
(e) the licensee has given the consumer a copy of the accepted quote.
Civil penalty: 2,000 penalty units.
(2) The quote must:
(a) be in writing; and
(b) give information about the credit assistance and other services that the quote covers; and
(c) specify the maximum amount that will be payable by the consumer to the licensee in relation to the licensee’s credit assistance and other services; and
(d) give information about what that amount relates to, including:
(i) the maximum amount of the licensee’s fee for providing the credit assistance and other services; and
(ii) the maximum amount of charges that will be incurred by the licensee for matters associated with providing the credit assistance and other services; and
(iii) the maximum amount of fees or charges that will be payable by the licensee to another person on the consumer’s behalf; and
(e) state whether the maximum amount or any other amount will be payable by the consumer to the licensee if a consumer lease is not entered; and
(f) comply with any other requirements prescribed by the regulations.
Manner of giving quote
(3) The licensee must give the quote to the consumer in the manner (if any) prescribed by the regulations.
No demanding payment of amount exceeding quoted amount
(4) The licensee must not request or demand payment of an amount that exceeds the maximum amount set out in the quote.
Civil penalty: 2,000 penalty units.
No demanding payment before credit assistance provided
(5) The licensee must not request or demand payment of an amount for the licensee’s credit assistance before the licensee provides the assistance.
Civil penalty: 2,000 penalty units.
Caveats
(6) The licensee must not lodge, or threaten to lodge, a caveat in relation to land to induce the consumer to pay an amount to the licensee for the licensee’s credit assistance or other services.
Civil penalty: 2,000 penalty units.
Division 4—Obligations of credit assistance providers before providing credit assistance for consumer leases
138 Obligations of credit assistance providers before providing credit assistance for consumer leases
(1) A licensee must not provide credit assistance to a consumer on a day (the assistance day) by:
(a) suggesting that the consumer apply for a particular consumer lease with a particular lessor; or
(b) assisting the consumer to apply for a particular consumer lease with a particular lessor;
unless the licensee has, within 90 days (or other period prescribed by the regulations) before the assistance day:
(c) made a preliminary assessment that:
(i) is in accordance with subsection 139(1); and
(ii) covers the period proposed for the entering of the lease; and
(d) made the inquiries and verification in accordance with section 140.
Civil penalty: 2,000 penalty units.
(2) A licensee must not provide credit assistance to a consumer on a day (the assistance day) by suggesting that the consumer remain in a particular consumer lease with a particular lessor unless the licensee has, within 90 days (or other period prescribed by the regulations) before the assistance day:
(a) made a preliminary assessment that:
(i) is in accordance with subsection 139(2); and
(ii) covers a period in which the assistance day occurs; and
(b) made the inquiries and verification in accordance with section 140.
Civil penalty: 2,000 penalty units.
139 Preliminary assessment of unsuitability of the consumer lease
(1) For the purposes of paragraph 138(1)(c), the licensee must make a preliminary assessment that:
(a) specifies the period the assessment covers; and
(b) assesses whether the consumer lease will be unsuitable for the consumer if the lease is entered in that period.
(2) For the purposes of paragraph 138(2)(a), the licensee must make a preliminary assessment that:
(a) specifies the period the assessment covers; and
(b) assesses whether the consumer lease will be unsuitable for the consumer if the consumer remains in the lease in that period.
Note: The licensee is not required to make a preliminary assessment under this section if the credit assistance is not provided.
140 Reasonable inquiries etc. about the consumer
(1) For the purposes of paragraph 138(1)(d) or 138(2)(b), the licensee must, before making the preliminary assessment:
(a) make reasonable inquiries about the consumer’s requirements and objectives in relation to the consumer lease; and
(b) make reasonable inquiries about the consumer’s financial situation; and
(c) take reasonable steps to verify the consumer’s financial situation; and
(d) make any inquiries prescribed by the regulations about any matter prescribed by the regulations; and