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This is a Bill, not an Act. For current law, see the Acts databases.
2016-2017-2018
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
National Consumer Credit Protection
Amendment (Small Amount Credit
Contract and Consumer Lease Reforms)
Bill 2018
No. , 2018
(Mr Hammond)
A Bill for an Act to amend the National Consumer
Credit Protection Act 2009, and for related purposes
No. , 2018
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
i
Contents
1
Short title ........................................................................................... 1
2
Commencement ................................................................................. 1
3
Schedules ........................................................................................... 2
Schedule 1--Amendments
3
National Consumer Credit Protection Act 2009
3
No. , 2018
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
1
A Bill for an Act to amend the National Consumer
1
Credit Protection Act 2009, and for related purposes
2
The Parliament of Australia enacts:
3
1 Short title
4
This Act is the National Consumer Credit Protection Amendment
5
(Small Amount Credit Contract and Consumer Lease Reforms) Act
6
2018.
7
2 Commencement
8
(1) Each provision of this Act specified in column 1 of the table
9
commences, or is taken to have commenced, in accordance with
10
column 2 of the table. Any other statement in column 2 has effect
11
according to its terms.
12
2
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
No. , 2018
1
Commencement information
Column 1
Column 2
Column 3
Provisions
Commencement
Date/Details
1. The whole of
this Act
12 months after the day this Act receives the
Royal Assent.
Note:
This table relates only to the provisions of this Act as originally
2
enacted. It will not be amended to deal with any later amendments of
3
this Act.
4
(2) Any information in column 3 of the table is not part of this Act.
5
Information may be inserted in this column, or information in it
6
may be edited, in any published version of this Act.
7
3 Schedules
8
Legislation that is specified in a Schedule to this Act is amended or
9
repealed as set out in the applicable items in the Schedule
10
concerned, and any other item in a Schedule to this Act has effect
11
according to its terms.
12
Amendments Schedule 1
No. , 2018
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
3
Schedule 1--Amendments
1
2
National Consumer Credit Protection Act 2009
3
1 Subsection 5(1)
4
Insert:
5
consumer lease for household goods has the same meaning as in
6
section 204 of the National Credit Code.
7
hardship notice has the same meaning as in section 204 of the
8
National Credit Code.
9
household goods has the same meaning as in section 204 of the
10
National Credit Code.
11
unsolicited invitation by another person means a communication
12
made by a person to a consumer that the person would have been
13
prohibited from making under sections 124C or 133CF had the
14
person been a licensee.
15
2 Section 111 (paragraph relating to Division 4)
16
Repeal the paragraph, substitute:
17
Division 4 requires a licensee, before providing credit assistance to
18
a consumer in relation to a credit contract, to make a preliminary
19
assessment as to whether the contract will be unsuitable for the
20
consumer. To do this, the licensee must make inquiries and
21
verifications about the consumer's requirements, objectives and
22
financial situation. It also imposes requirements in relation to
23
recording the preliminary assessment that a small amount credit
24
contract is not unsuitable. The licensee must give the consumer a
25
copy of the assessment if requested.
26
3 Section 111 (paragraph relating to Division 7)
27
Repeal the paragraph, substitute:
28
Schedule 1 Amendments
4
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
No. , 2018
Division 7 prohibits a licensee from providing credit assistance to a
1
consumer in relation to short-term credit contracts. It also imposes
2
requirements on a licensee who makes representations about
3
providing credit assistance in relation to small amount credit
4
contracts. It also prohibits a licensee from making third party
5
unsolicited small amount credit contract invitations.
6
4 After section 116
7
Insert:
8
116A Recording the preliminary assessment for a small amount
9
credit contract
10
(1) The licensee must:
11
(a) record in writing the preliminary assessment made for the
12
purposes of paragraph 115(1)(c) or paragraph 115(2)(a) that a
13
small amount credit contract is not unsuitable at the time the
14
assessment is made; and
15
(b) comply with any requirements for that written assessment
16
determined by ASIC under subsection (2).
17
Civil penalty:
2,000 penalty units.
18
(2) ASIC may, by legislative instrument, determine the form and
19
content of the written assessment for the purposes of
20
subsection (1).
21
Strict liability offence
22
(3) A person commits an offence if:
23
(a) the person is subject to a requirement under subsection (1);
24
and
25
(b) the person engages in conduct; and
26
(c) the conduct contravenes the requirement.
27
Criminal penalty:
50 penalty units.
28
(4) Subsection (3) is an offence of strict liability.
29
Note:
For strict liability, see section 6.1 of the Criminal Code.
30
Amendments Schedule 1
No. , 2018
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
5
5 Subsection 118(3A)
1
Repeal the subsection.
2
6 After subsection 120(1)
3
Insert:
4
(1A) Without limiting the provisions of this Act, the requirement to give
5
a written copy of the assessment in subsection (1) may be met in
6
accordance with the Electronic Transactions Act 1999.
7
7 Subsection 123(3A)
8
Repeal the subsection.
9
8 Section 124B (heading)
10
Repeal the heading, substitute:
11
124B Licensee who makes representations about credit assistance in
12
relation to small amount credit contracts must provide
13
information etc.
14
9 Subsection 124B(1)
15
Repeal the subsection, substitute:
16
(1) If a licensee represents that the licensee provides, or is able to
17
provide, credit assistance to consumers in relation to small amount
18
credit contracts, the licensee must provide information in
19
accordance with any instrument made pursuant to subsection (1A).
20
Civil penalty:
2,000 penalty units.
21
(1A) ASIC may, by legislative instrument, determine:
22
(a) the information that must be provided by a licensee; and
23
(b) how the information is to be provided; and
24
(c) when the information is to be provided.
25
10 At the end of Division 7 of Part 3-1
26
Add:
27
Schedule 1 Amendments
6
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
No. , 2018
124C Licensee not to make third party unsolicited small amount
1
credit contract invitations
2
Requirement
3
(1) A licensee must not make a third party unsolicited small amount
4
credit contract invitation.
5
Civil penalty:
2,000 penalty units.
6
Offence
7
(2) A person commits an offence if:
8
(a) the person is subject to a requirement under subsection (1);
9
and
10
(b) the person engages in conduct; and
11
(c) the conduct contravenes the requirements.
12
Criminal penalty:
100 penalty units.
13
Strict liability offence
14
(3) A person commits an offence if:
15
(a) the person is subject to a requirement under subsection (1);
16
and
17
(b) the person engages in conduct; and
18
(c) the conduct contravenes the requirements.
19
Criminal penalty:
10 penalty units.
20
(4) Subsection (3) is an offence of strict liability.
21
Note:
For strict liability, see section 6.1 of the Criminal Code.
22
Meaning of third party unsolicited small amount credit contract
23
invitation
24
(5) A licensee makes a third party unsolicited small amount credit
25
contract invitation if:
26
(a) the licensee makes any form of communication to a
27
consumer who is a person that the licensee knows:
28
(i) is a debtor under a small amount credit contract; or
29
Amendments Schedule 1
No. , 2018
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
7
(ii) was a debtor under a small amount credit contract at any
1
time in the 2 year period before the time the
2
communication is made; and
3
(b) one or more of the following conditions is satisfied in
4
relation to the communication:
5
(i) the communication offers to enter into a small amount
6
credit contract with the consumer; or
7
(ii) the communication invites the consumer to apply for a
8
small amount credit contract; or
9
(iii) the communication is about a small amount credit
10
contract referred to in paragraph (5)(a) and a reasonable
11
person would conclude that the licensee made the
12
communication to the consumer for the purpose (or for
13
purposes including the purpose) of encouraging the
14
consumer to consider applying for a small amount credit
15
contract.
16
(6) The regulations may make provisions that apply to determining
17
whether a communication is covered by the definition in
18
subsection (5).
19
11 Section 125 (paragraph relating to Division 3)
20
Repeal the paragraph, substitute:
21
Division 3 requires a licensee, before doing particular things (such
22
as entering into a credit contract), to make an assessment as to
23
whether the contract will be unsuitable. To do this, the licensee
24
must make inquiries and verifications about the consumer's
25
requirements, objectives and financial situation. It also imposes
26
requirements in relation to recording the assessment that a small
27
amount credit contract is not unsuitable. The licensee must give the
28
consumer a copy of the assessment if requested.
29
12 After section 129
30
Insert:
31
129A Recording the assessment for a small amount credit contract
32
(1) The licensee must:
33
Schedule 1 Amendments
8
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
No. , 2018
(a) record in writing the assessment made for the purposes of
1
paragraph 128(c) that a small amount credit contract is not
2
unsuitable at the time the assessment is made; and
3
(b) comply with any requirements for that written assessment
4
determined by ASIC under subsection (2).
5
Civil penalty:
2,000 penalty units.
6
(2) ASIC may, by legislative instrument, determine the form and
7
content of the written assessment for the purposes of
8
subsection (1).
9
Strict liability offence
10
(3) A person commits an offence if:
11
(a) the person is subject to a requirement under subsection (1);
12
and
13
(b) the person engages in conduct; and
14
(c) the conduct contravenes the requirement.
15
Criminal penalty:
50 penalty units.
16
(4) Subsection (3) is an offence of strict liability.
17
Note:
For strict liability, see section 6.1 of the Criminal Code.
18
13 Subsection 131(3A)
19
Repeal the subsection.
20
14 After subsection 132(2)
21
Insert:
22
(2A) Without limiting the provisions of this Act, the requirement to give
23
a written copy of the assessment in subsections (1) and (2) may be
24
met in accordance with the Electronic Transactions Act 1999.
25
15 Subsection 133(3A)
26
Repeal the subsection.
27
16 Section 133C (paragraph relating to Division 2)
28
Repeal the paragraph, substitute:
29
Amendments Schedule 1
No. , 2018
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
9
Division 2 prohibits a licensee from entering into, or increasing the
1
credit limit of, short-term credit contracts. It also imposes
2
requirements on a licensee who makes representations about
3
entering into small amount credit contracts and prohibits a licensee
4
from entering into, or offering to enter into, small amount credit
5
contracts in certain circumstances. It also prohibits a licensee from
6
making unsolicited small amount credit contract invitations. It also
7
provides that the consumer is not liable to pay certain fees and
8
charges under small amount credit contracts in certain
9
circumstances.
10
17 Section 133CB (heading)
11
Repeal the heading, substitute:
12
133CB Licensee who makes representations in relation to small
13
amount credit contracts must provide information etc.
14
18 Subsection 133CB(1)
15
Repeal the subsection, substitute:
16
(1) If a licensee represents that the licensee enters into, or is able to
17
enter into, small amount credit contracts with consumers under
18
which the licensee would be the credit provider, the licensee must
19
provide information in accordance with any instrument made
20
pursuant to subsection (1A).
21
Civil penalty:
2,000 penalty units.
22
(1A) ASIC may by legislative instrument, determine:
23
(a) the information that must be provided by a licensee; and
24
(b) how the information is to be provided; and
25
(c) when the information is to be provided.
26
19 Subsection 133CC(1)
27
Repeal the subsection, substitute:
28
(1) A licensee must not enter into, or offer to enter into, a small
29
amount credit contract with a consumer who will be the debtor
30
under the contract if the repayments that would be required under
31
Schedule 1 Amendments
10
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
No. , 2018
the contract would not meet the requirements prescribed by the
1
regulations.
2
Civil penalty:
2,000 penalty units.
3
Note:
For example, the regulations may provide that the amount of a
4
repayment must not exceed a specified percentage of the consumer's
5
income.
6
20 At the end of section 133CC
7
Add:
8
Civil effect
9
(3) If a licensee enters into a small amount credit contract in
10
contravention of subsection (1) then:
11
(a) each provision (the void provisions) of the small amount
12
credit contract that imposes a monetary liability to pay a fee
13
or charge of the kind described in paragraph 31A(1)(a) or (b)
14
of the National Credit Code (whether or not that liability is
15
imposed consistently with the National Credit Code) is void
16
to the extent that the provision relates to the liability;
17
(b) the debtor may recover as a debt due to the debtor any
18
amount paid to the licensee under the void provisions to the
19
extent that the amount relates to the liability.
20
21 After section 133CC
21
Insert:
22
133CD Licensee must not require or accept payment in relation to a
23
small amount credit contract etc.
24
(1) A licensee, or a person prescribed by the regulations, must not
25
require or accept payment by the debtor of a repayment under a
26
small amount credit contract.
27
Criminal penalty:
100 penalty units.
28
(2) Subsection (1) does not apply to the extent that the repayment does
29
not exceed the amount which meets the requirements prescribed by
30
the regulations for the purposes of section 133CC.
31
Amendments Schedule 1
No. , 2018
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
11
Civil effect
1
(3) If a licensee or a person contravenes subsection (1):
2
(a) the debtor is not liable (and is taken never to have been
3
liable) to make the payment to the licensee or person; and
4
(b) the debtor may recover as a debt due to the debtor the amount
5
of any payment made by the debtor to the credit provider or
6
person.
7
133CE Licensee must not enter into a small amount credit contract
8
if repayments are not equal
9
(1) A licensee must not enter into, or offer to enter into, a small
10
amount credit contract with a consumer who will be the debtor
11
under the contract under which any of the following applies:
12
(a) repayments required under the contract are not equal;
13
(b) the interval between the date on which credit is first provided
14
under the contract and the first payment date is longer than
15
the interval between payment dates;
16
(c) the intervals between payment dates are not equal.
17
Civil penalty:
2,000 penalty units.
18
(2) For the purposes of paragraph (1)(a), repayments required under a
19
small amount credit contract will be equal if:
20
(a) each repayment is of the same amount; or
21
(b) each repayment except the last repayment is of the same
22
amount and the difference between the amount of the last
23
repayment and each other repayment is not more than 5%
24
less than the amount of each other repayment; or
25
(c) the repayments meet the conditions determined by ASIC
26
under subsection (5).
27
(3) A payment date is the date on or by which a repayment is required
28
to be made under the contract.
29
(4) For the purposes of paragraph (1)(c), if a small amount credit
30
contract provides that:
31
(a) repayments are required to be made on a fixed day of each
32
week, fortnight or month; and
33
Schedule 1 Amendments
12
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
No. , 2018
(b) f that fixed day falls on a day that is not a business day, the
1
repayment is required on the immediately preceding or
2
succeeding business day;
3
the intervals between payment dates will be equal.
4
(5) ASIC may, by legislative instrument, determine conditions for the
5
purpose of paragraph (2)(c).
6
Strict liability offence
7
(6) A person commits an offence if:
8
(a) the person is subject to a requirement under subsection (1);
9
and
10
(b) the person engages in conduct; and
11
(c) the conduct contravenes the requirement.
12
Criminal penalty:
100 penalty units.
13
Note:
For strict liability, see section 6.1 of the Criminal Code.
14
(7) Subsection (6) is an offence of strict liability.
15
Note:
For strict liability, see section 6.1 of the Criminal Code.
16
22 At the end of Division 2 of Part 3-2C
17
Add:
18
133CF Licensee not to make unsolicited small amount credit
19
contract invitations
20
Requirement
21
(1) A licensee must not make an unsolicited small amount credit
22
contract invitation.
23
Civil penalty:
2,000 penalty units.
24
Offence
25
(2) A person commits an offence if:
26
(a) the person is subject to a requirement under subsection (1);
27
and
28
(b) the person engages in conduct; and
29
Amendments Schedule 1
No. , 2018
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
13
(c) the conduct contravenes the requirement.
1
Criminal penalty:
100 penalty units.
2
Strict liability offence
3
(3) A person commits an offence if:
4
(a) the person is subject to a requirement under subsection (1);
5
and
6
(b) the person engages in conduct; and
7
(c) the conduct contravenes the requirement.
8
Criminal penalty:
10 penalty units.
9
(4) Subsection (3) is an offence of strict liability.
10
Note:
For strict liability, see section 6.1 of the Criminal Code.
11
Meaning of unsolicited small amount credit contract invitation
12
(5) A licensee makes an unsolicited small amount credit contract
13
invitation if:
14
(a) the licensee makes any form of communication to a
15
consumer who:
16
(i) is a debtor under a small amount credit contract with the
17
licensee as credit provider; or
18
(iii) was a debtor under a small amount credit contract with
19
the licensee as credit provider at any time in the 2 year
20
period before the time the communication is made; or
21
(iii) a person that the licensee knows:
22
(A) is a debtor under a small amount credit contract
23
with another credit provider; or
24
(b) was a debtor under a small amount credit
25
contract with another credit provider at any
26
time in the 2 year period before the time the
27
communication is made; and
28
(b) one or more of the following conditions is satisfied in
29
relation to the communication:
30
(i) the communication offers to enter into a small amount
31
credit contract with the consumer; or
32
Schedule 1 Amendments
14
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
No. , 2018
(iii) the communication invites the consumer to apply for a
1
small amount credit contract; or
2
(iii) the communication is about a small amount credit
3
contract referred to in paragraph (5)(a) and a reasonable
4
person would conclude that the licensee made the
5
communication to the consumer for the purpose (or for
6
purposes including the purpose) of encouraging the
7
consumer to consider applying for a small amount credit
8
contract.
9
(6) The regulations may make provisions that apply to determining
10
whether a communication is covered by the definition in
11
subsection (5).
12
133CG Loss of charges
13
(1) This section applies to a small amount credit contract which:
14
(a) was entered between a consumer who is the debtor under the
15
contract and a licensee in the following circumstances:
16
(i) before the contract was entered into, the licensee had
17
made an unsolicited small amount credit contract
18
invitation to the consumer in contravention of
19
section 133CF; and
20
(ii) a reasonable person would conclude that the consumer
21
entered into that contract as a result of that invitation; or
22
(b) was entered between a consumer who is the debtor under the
23
contract and a licensee in the following circumstances:
24
(i) the licensee knew that:
25
(A) a licensee had made a third party unsolicited
26
small amount credit contract invitation in
27
contravention of section 124C; or
28
(B) an unsolicited invitation by another person had
29
been made to that consumer; and
30
(ii) a reasonable person would conclude the consumer
31
entered into that contract as a result of that unsolicited
32
invitation by another person.
33
(2) Each provision (the void provisions) of a contract to which this
34
section applies that imposes a monetary liability to pay a fee or
35
charge of the kind described in paragraph 31A(1)(a) or (b) of the
36
Amendments Schedule 1
No. , 2018
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
15
National Credit Code (whether or not the liability is imposed
1
consistently with the National Credit Code) is void to the extent
2
that the provision relates to the liability.
3
(3) The debtor may recover as a debt due to the debtor any amount
4
paid to the credit provider under the void provisions to the extent
5
that the amount relates to the liability.
6
23 Section 134 (paragraph relating to Division 4)
7
Repeal the paragraph, substitute:
8
Division 4 requires a licensee, before providing credit assistance to
9
a consumer in relation to a consumer lease, to make a preliminary
10
assessment as to whether the lease will be unsuitable for the
11
consumer. To do this, the licensee must make inquiries and
12
verifications about the consumer's requirements, objectives and
13
financial situation. It also imposes requirements in relation to
14
recording the preliminary assessment that a consumer lease is not
15
unsuitable. The licensee must give the consumer a copy of the
16
assessment if requested.
17
24 At the end of section 134
18
Add:
19
Division 7 imposes requirements on a licensee who makes
20
representations about providing credit assistance in relation to
21
consumer leases for household goods.
22
25 After section 139
23
Insert:
24
139A Recording the preliminary assessment for a consumer lease
25
for household goods
26
(1) The licensee must:
27
(a) record in writing the preliminary assessment made for the
28
purposes of paragraph 138(1)(c) or paragraph 138(2)(a) that a
29
Schedule 1 Amendments
16
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
No. , 2018
consumer lease for household goods is not unsuitable at the
1
time the assessment is made; and
2
(b) comply with any requirements for that written assessment
3
determined by ASIC under subsection (2).
4
Civil penalty:
2,000 penalty units.
5
(2) ASIC may, by legislative instrument, determine the form and
6
content of the written assessment for the purposes of
7
subsection (1).
8
Strict liability offence
9
(3) A person commits an offence if:
10
(a) the person is subject to a requirement under subsection (1);
11
and
12
(b) the person engages in conduct; and
13
(c) the conduct contravenes the requirement.
14
Criminal penalty:
50 penalty units.
15
(4) Subsection (3) is an offence of strict liability.
16
Note:
For strict liability, see section 6.1 of the Criminal Code.
17
26 After subsection 140(1)
18
Insert:
19
(1A) If:
20
(a) the goods to be hired under the lease are household goods;
21
and
22
(b) the consumer holds (whether alone or jointly with another
23
person) an account with an ADI into which income payable
24
to the consumer is credited;
25
the licensee must, in verifying the consumer's financial situation
26
for the purposes of paragraph 138(1)(d), obtain and consider
27
account statements that cover at least the immediately preceding
28
period of 90 days.
29
(1B) Subsection (1A) does not limit paragraph (1)(c) of this section.
30
Amendments Schedule 1
No. , 2018
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
17
27 After subsection 143(1)
1
Insert:
2
(1A) Without limiting the provisions of this Act, the requirement to give
3
a written copy of the assessment in paragraph (1) may be met in
4
accordance with the Electronic Transactions Act 1999.
5
28 At the end of Part 3-3
6
Add:
7
Division 7--Special rules for consumer leases for
8
household goods
9
147A Licensee who makes representations about credit assistance in
10
relation to consumer leases for household goods must
11
provide information etc.
12
Requirement
13
(1) If a licensee represents that the licensee provides, or is able to
14
provide, credit assistance to consumers in relation to consumer
15
leases for household goods, the licensee must provide information
16
in accordance with any instrument made pursuant to subsection (2).
17
Civil penalty:
2,000 penalty units.
18
(2) ASIC may, by legislative instrument, determine:
19
(a) the information that must be provided by a licensee; and
20
(b) how the information is to be provided; and
21
(c) when the information is to be provided.
22
Offence
23
(3) A person commits an offence if:
24
(a) the person is subject to a requirement under subsection (1);
25
and
26
(b) the person engages in conduct; and
27
(c) the conduct contravenes the requirement.
28
Criminal penalty:
50 penalty units.
29
Schedule 1 Amendments
18
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
No. , 2018
29 Section 148 (paragraph relating to Division 3)
1
Repeal the paragraph, substitute:
2
Division 3 requires a licensee, before doing particular things (such
3
as entering into a consumer lease), to make an assessment as to
4
whether the lease is not unsuitable. To do this, the licensee must
5
make inquiries and verifications about the consumer's
6
requirements, objectives and financial situation. It also imposes
7
requirements in relation to recording an assessment that a
8
consumer lease is not unsuitable. The licensee must give the
9
consumer a copy of the assessment if requested.
10
30 At the end of section 148
11
Add:
12
Division 5 prohibits a licensee from entering into, or offering to
13
enter into, a consumer lease for household goods in certain
14
circumstances. It also imposes requirements on a licensee who
15
makes representations about consumer leases for household goods.
16
31 After section 152
17
Insert:
18
152A Recording the assessment for a consumer lease for household
19
goods
20
(1) The licensee must:
21
(a) record in writing the assessment made for the purposes of
22
paragraph 151(c) that a consumer lease for household goods
23
is not unsuitable at the time the assessment is made; and
24
(b) comply with any requirements for that written assessment
25
determined by ASIC under subparagraph (2).
26
Civil penalty:
2,000 penalty units.
27
(2) ASIC may, by legislative instrument, determine the form and
28
content of the written assessment for the purposes of subsection (1)
29
above.
30
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National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
19
Strict liability offence
1
(3) A person commits an offence if:
2
(a) the person is subject to a requirement under subsection (1);
3
and
4
(b) the person engages in conduct; and
5
(c) the conduct contravenes the requirement.
6
Criminal penalty:
50 penalty units.
7
(4) Subsection (3) is an offence of strict liability.
8
Note:
For strict liability, see section 6.1 of the Criminal Code.
9
32 After subsection 153(1)
10
Insert:
11
(1A) If:
12
(a) the goods to be hired under the lease are household goods;
13
and
14
(b) the consumer holds (whether alone or jointly with another
15
person) an account with an ADI into which income payable
16
to the consumer is credited;
17
the licensee must, in verifying the consumer's financial situation
18
for the purposes of paragraph 151(d), obtain and consider account
19
statements that cover at least the immediately preceding period of
20
90 days.
21
(1B) Subsection (1A) does not limit paragraph (1)(c).
22
33 After subsection 155(2)
23
Insert:
24
(2A) Without limiting the provisions of this Act, the requirement to give
25
a written copy of the assessment in subsections (1) and (2) may be
26
met in accordance with the Electronic Transactions Act 1999.
27
34 At the end of Part 3-4
28
Add:
29
Schedule 1 Amendments
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National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
No. , 2018
Division 5--Consumer leases for household goods
1
156A Licensee must not enter into a consumer lease for household
2
goods if the payments do not meet the prescribed
3
requirements
4
Requirement
5
(1) A licensee must not enter into, or offer to enter into, a consumer
6
lease for household goods with a consumer who will be the lessee
7
under the lease if the amount that would be required to be paid
8
under the lease by the lessee would not meet the requirements
9
prescribed by the regulations.
10
Civil penalty:
2,000 penalty units.
11
Note:
For example, the regulations may provide that the amount of a
12
payment must not exceed a specified percentage of the lessee's
13
income.
14
Offence
15
(2) A person commits an offence if:
16
(a) the person is subject to a requirement under subsection (1);
17
and
18
(b) the person engages in conduct; and
19
(c) the conduct contravenes the requirement.
20
Criminal penalty:
50 penalty units.
21
Civil effect
22
(3) If a lessor enters into a consumer lease in contravention of
23
subsection (1) then:
24
(a) each provision (the void provisions) of the consumer lease
25
that imposes a monetary liability on the lessee in excess of
26
the base price of the goods hired under the lease (whether or
27
not that liability is imposed consistently with the National
28
Credit Code) is void to the extent that the provision relates to
29
the liability;
30
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National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
21
(b) the lessee may recover as a debt due to the lessee any amount
1
paid to the lessor under the void provisions to the extent that
2
the amount relates to the liability.
3
156B Lessor or prescribed person must not require or accept
4
payments in relation to a consumer lease etc.
5
(1) A lessor, or a person prescribed by the regulations, must not
6
require or accept payment by the lessee of an amount under a
7
consumer lease.
8
Criminal penalty:
100 penalty units.
9
(2) Subsection (1) does not apply to the extent that the amount does
10
not exceed the amount which meets the requirements prescribed by
11
the regulations for the purposes of section 156A.
12
Civil effect
13
(3) If a lessor or a person contravenes subsection (1):
14
(a) the lessee is not liable (and is taken never to have been liable)
15
to make the payment to the lessor or person; and
16
(b) the lessee may recover as a debt due to the lessee the amount
17
of any payment made by the lessee to the lessor or person.
18
156C Licensee who makes representations about consumer leases
19
for household goods must provide information etc.
20
Requirement
21
(1) If a licensee represents that the licensee enters into, or is able to
22
enter into, consumer leases for household goods with consumers
23
under which the licensee would be the lessor, the licensee must
24
provide information in accordance with any instrument made
25
pursuant to subsection (2).
26
Civil penalty:
2,000 penalty units.
27
(2) ASIC may, by legislative instrument, determine:
28
(a) the information that must be provided by a licensee; and
29
(b) how the information is to be provided; and
30
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National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
No. , 2018
(c) when the information is to be provided.
1
Offence
2
(3) A person commits an offence if:
3
(a) the person is subject to a requirement under subsection (1);
4
and
5
(b) the person engages in conduct; and
6
(c) the conduct contravenes the requirement.
7
Criminal penalty:
50 penalty units.
8
35 At the end of section 160A
9
Add:
10
Division 5 contains restrictions in relation to the use and disclosure
11
of account statements and information contained in account
12
statements.
13
36 At the end of Part 3-6A
14
Add:
15
Division 5--Use or disclosure of account statements
16
160F Application of this Division
17
(1) This Division applies to a licensee who has received an account
18
statement from a consumer in connection with:
19
(a) a proposed small amount credit contract; or
20
(b) a proposed consumer lease for household goods; or
21
(c) a small amount credit contract; or
22
(d) a consumer lease for household goods.
23
(2) This Division also applies to a person who has received an account
24
statement from a person described in subsection (1).
25
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National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
23
160G Permitted use and disclosure of account statements
1
A person to whom this Division applies may use or disclose an
2
account statement or information contained in an account statement
3
if:
4
(a) the use or disclosure is necessary for the person to comply
5
with their obligations under this Act or the National Credit
6
Code; or
7
(b) the use or disclosure is required or authorised by or under an
8
Australian law or a court or tribunal order; or
9
(c) for the purposes of considering a hardship notice.
10
160H Prohibited use of account statements
11
(1) A person to whom this Division applies must not use or disclose an
12
account statement or information contained in an account statement
13
unless the use or disclosure is permitted under section 160G.
14
Civil penalty:
2,000 penalty units.
15
Offence
16
(2) A person commits an offence if:
17
(a) the person is a person to whom this Division applies; and
18
(b) the person uses or discloses an account statement or
19
information contained in an account statement; and
20
(c) the use or disclosure is not permitted by section 160G.
21
Criminal penalty:
100 penalty units.
22
Strict liability offence
23
(3) A person commits an offence if:
24
(a) the person is a person to whom this Division applies; and
25
(b) the person uses or discloses an account statement or
26
information contained in an account statement; and
27
(c) the use or disclosure is not permitted by section 160G.
28
Criminal penalty:
10 penalty units.
29
(4) Subsection (3) is an offence of strict liability.
30
Schedule 1 Amendments
24
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
No. , 2018
Note:
For strict liability, see section 6.1 of the Criminal Code.
1
37 Section 323 (after the first paragraph)
2
Insert:
3
Division 1A has rules that prohibit schemes that are designed to
4
avoid the application of this Act.
5
38 After Division 1 of Part 7-1
6
Insert:
7
Division 1A--Avoidance schemes
8
323A Prohibition on avoidance in relation to small amount credit
9
contracts and consumer leases
10
Prohibition on avoidance
11
(1) A person must not (either alone or with others) enter into, or carry
12
out (to any extent), a scheme if it is reasonable to conclude that a
13
purpose of the person doing so is to prevent a contract (the
14
contrived contract) covered by the following paragraphs from
15
being a small amount credit contract or a consumer lease:
16
(a) the contract is between a consumer and either the person or
17
someone else who is or was connected with the person;
18
(b) the contract is connected with the scheme.
19
Civil penalty:
2,000 penalty units.
20
Meaning of scheme
21
(2) A scheme is:
22
(a) any agreement, arrangement, understanding, promise or
23
undertaking, whether express or implied; or
24
(b) any scheme, plan, proposal, action, course of action or course
25
of conduct, whether unilateral or otherwise.
26
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National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
25
Whether it is reasonable to draw conclusion as to purpose
1
(3) For the purpose of determining whether it is reasonable to draw a
2
conclusion described in subsection (1):
3
(a) regard must be had to the extent to which the circumstances
4
described in subsection (4) exist; and
5
(b) the more any of those circumstances exist, the more it is
6
reasonable to draw that conclusion.
7
This does not limit the matters to which regard may be had in
8
making the determination.
9
(4) The circumstances are as follows:
10
(a) the contrived contract or the scheme has a similar effect,
11
operation or structure to a small amount credit contract or
12
consumer lease but the contrived contract is not a small
13
amount credit contract or consumer lease because of the
14
artificiality or complexity of the contrived contract or scheme
15
or because of one or more of the following:
16
(i) there are more parties to the contrived contract or
17
scheme than is necessary for the provision of credit, or
18
hire of goods, to the consumer;
19
(ii) there are more elements of the scheme than are
20
necessary for the provision of credit to the consumer
21
under a small amount credit contract or for the hire of
22
goods to the consumer under a consumer lease;
23
(iii) the contrived contract deals with fewer transactions than
24
are reasonable, but the scheme deals with at least as
25
many transactions as are reasonable, for the provision of
26
credit to the consumer under a small amount credit
27
contract or for the hire of goods to the consumer under a
28
consumer lease;
29
(b) the consumer has been or is to be charged in connection with
30
the contrived contract an amount (however described) that, if
31
the contrived contract were a small amount credit contract or
32
consumer lease:
33
(i) would be a fee, charge or liability whose imposition is
34
prohibited by section 23A or 31A of the National Credit
35
Code; or
36
Schedule 1 Amendments
26
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
No. , 2018
(ii) the consumer would not be liable to pay because of the
1
operation of section 175AB or 175AC of the National
2
Credit Code;
3
(c) the consumer is required to pay under the contrived contract:
4
(i) repayments that, if the contrived contract was a small
5
amount credit contract and another party to that contract
6
had been a licensee, the consumer could not have been
7
required to pay under the contract because of the
8
operation of section 133CC, 133CD or 133CE; or
9
(ii) amounts that, if the contrived contract was a consumer
10
lease and another party to that contract was a licensee,
11
the consumer could not have lawfully been required to
12
pay because of the operation of section 156A or 156B of
13
the Act;
14
(d) if:
15
(i) the contrived contract was a small amount credit
16
contract or a consumer lease; or
17
(ii) the scheme had resulted in the entry into a small amount
18
credit contract or consumer lease with a consumer or the
19
making of an offer to a consumer to enter into a small
20
amount credit contract or a consumer lease;
21
the person or someone else connected to the person would, if
22
they had been a licensee, have contravened any of the
23
provisions in Parts 3-2C, 3-3, or 3-4;
24
(e) both of the following apply in relation to the consumer's
25
financial obligations under the contrived contract or under
26
any aspect of the scheme:
27
(i) the person or someone else connected with the person
28
has secured or will secure the performance of those
29
obligations by taking an interest in the consumer's
30
principal place of residence, a motor vehicle of the
31
consumer or goods of the consumer that are essential
32
household property for the purposes of section 50 of the
33
National Credit Code (the mortgaged property);
34
(ii) it is reasonable to assume that the person took the
35
security because:
36
(A) the consumer would likely only be able to
37
comply with their financial obligations under
38
Amendments Schedule 1
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National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
27
the contract by selling the mortgaged property;
1
or
2
(B) the person did not make reasonable inquiries
3
into whether the consumer would only be able
4
to comply with their financial obligations under
5
the contract (or under another aspect of the
6
scheme) by selling the mortgaged property;
7
(f) the person, or someone who is or was connected with the
8
person:
9
(i) represents to any consumer that the person or someone
10
who is or was connected with the person could provide
11
credit or finance (however described) or hire goods to a
12
consumer where, if the consumer entered into a small
13
amount credit contract or consumer lease whose terms
14
comply with this Act, that contract would likely be
15
unsuitable for that consumer for the reason described in
16
paragraphs 123(2)(a), 133(2)(a), 146(2)(a) or 156(2)(a);
17
or
18
(ii) represents that the person or someone who is connected
19
with the person would provide credit or finance
20
(however described) or hire goods where a reasonable
21
person would conclude that the representation is
22
directed to a class of consumers whose members are
23
more likely than people who are not members of the
24
class to, if they entered into a small amount credit
25
contract or a consumer lease whose terms comply with
26
this Act, have entered into a small amount credit
27
contract or consumer lease that would likely be
28
unsuitable for the reason described in paragraphs
29
123(2)(a), 133(2)(a), 146(2)(a) or 156(2)(a);
30
(g) one or more suggestions are or were made to the consumer
31
that the consumer give, in connection with the scheme or the
32
contrived contract, information that:
33
(i) is not true, or does not accurately reflect the consumer's
34
intention, when the information is, or is to be, given;
35
and
36
(ii) relates to a matter relevant to determining whether the
37
contrived contract is a small amount credit contract or
38
consumer lease;
39
Schedule 1 Amendments
28
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
No. , 2018
(h) all of the following apply:
1
(i) before the scheme is carried out, the person, or someone
2
who is or was connected with the person, carried on a
3
business of providing credit or hiring goods to
4
consumers in a different way (the old way);
5
(ii) there has been a change in the law relating to the
6
providing of credit, or hiring of goods, to consumers
7
since the business was carried on in the old way;
8
(iii) had whoever carried on the business continued to do so
9
in the old way, he or she would, because of the change
10
in the law, have been subject to obligations to which he
11
or she was not subject when carrying on the business in
12
the old way;
13
(i) the scheme is or has been advertised or promoted to
14
consumers in a manner:
15
(i) that a reasonable person would conclude was likely to
16
give consumers the impression that the scheme would
17
likely result in an offer to enter into, or entry into, a
18
small amount credit contract or consumer lease; or
19
(ii) that indicates that consumers will be provided with
20
access to a small amount credit contract or consumer
21
lease; and
22
that is inconsistent with the legal operation or effect of the
23
scheme;
24
(j) the person, or someone who is connected with the person, has
25
advertised or promoted the scheme in circumstances where
26
they do not offer small amount credit contracts or consumer
27
leases in the ordinary course of business;
28
(k) the person, or one or more others who are or were connected
29
with the person, are or were inappropriate persons as defined
30
in regulation 3 of the National Consumer Credit Protection
31
Regulations 2010.
32
Offence
33
(5) A person commits an offence if:
34
(a) the person is subject to a requirement under subsection (1);
35
and
36
(b) the person engages in conduct; and
37
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National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
29
(c) the conduct contravenes the requirements.
1
Criminal penalty:
120 penalty units, or two years imprisonment,
2
or both.
3
Presumption of avoidance for certain schemes
4
(6) For the purposes of subsection (1) (but not for the purposes of
5
subsection (5)), if:
6
(a) the person engages in conduct of the kind referred to in
7
paragraph (1)(a) or (b) in relation to a scheme; and
8
(b) the scheme is of a kind prescribed by the regulations or
9
determined by ASIC under subsection (8);
10
then it is presumed that it would be reasonable to conclude that the
11
purpose, or one of the purposes, of the person engaging in that
12
conduct was to prevent a contract from being a small amount credit
13
contract or a consumer lease.
14
(7) Subsection (6) does not apply if the person proves that, having
15
regard to the matters referred to in subsection (4), it would not be
16
reasonable to conclude that the purpose, or one of the purposes, of
17
the person engaging in that conduct was to prevent the contract
18
being a small amount consumer contract or consumer lease.
19
(8) ASIC may, by legislative instrument, determine a scheme for the
20
purposes of subsection (6).
21
Exceptions
22
(9) This section is subject to section 323B (Schemes and conduct that
23
are not prohibited).
24
Note:
Section 179 provides for remedies for persons who suffer loss or
25
damage as a result of a contravention of this section.
26
323B Schemes and conduct that are not prohibited
27
(1) Subsection 323A(1) does not apply to a scheme which is connected
28
with a contract that:
29
(a) is a contract for the provision of credit to which the National
30
Credit Code would apply apart from section 6, 203A or 203B
31
of the National Credit Code; or
32
Schedule 1 Amendments
30
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
No. , 2018
(b) would be a consumer lease apart from section 171, 203A or
1
203B of the National Credit Code.
2
(2) Subsection 323A(1) does not apply to conduct by a person if:
3
(a) the person is exempt from subsection 29(1) under section 109
4
or regulations made for the purposes of section 110; or
5
(b) both the following apply:
6
(i) the conduct would be a credit activity if a contract
7
connected with the scheme were a small amount credit
8
contract or a consumer lease;
9
(ii) credit activity of that kind is exempt from
10
subsection 29(1) under section 109 or regulations made
11
for the purposes of section 110.
12
323C Further prohibition on avoidance in relation to small amount
13
consumer contracts and consumer leases
14
Prohibition on avoidance
15
(1) A person must not (either alone or with others) enter into, or carry
16
out (to any extent), a scheme if it is reasonable to conclude that a
17
purpose of the person doing so is to avoid the application of a
18
provision of this Act that would apply in respect of:
19
(a) a consumer lease but not a credit contract; or
20
(b) a small amount credit contract but not:
21
(i) a consumer lease; or
22
(ii) a credit contract that is not a small amount credit
23
contract;
24
in relation to:
25
(c) the person; or
26
(d) any other person (a connected person) who has, or has had,
27
any connection (whether of a business, family or other
28
nature) with the person.
29
Civil penalty:
2,000 penalty units.
30
Meaning of scheme
31
(2) A scheme is:
32
Amendments Schedule 1
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National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
31
(a) any agreement, arrangement, understanding, promise or
1
undertaking, whether express or implied; or
2
(b) any scheme, plan, proposal, action, course of action or course
3
of conduct, whether unilateral or otherwise.
4
Whether it is reasonable to draw conclusion as to purpose
5
(3) For the purpose of determining whether it is reasonable to draw a
6
conclusion described in subsection (1):
7
(a) regard must be had to the extent to which the circumstances
8
described in subsection (4) exist; and
9
(b) the more any of those circumstances exist, the more it is
10
reasonable to draw that conclusion.
11
This does not limit the matters to which regard may be had in
12
making the determination.
13
(4) The circumstances are as follows:
14
(a) each of the following apply:
15
(i) the person, or a connected person, has a practice of
16
changing or otherwise altering the operation or effect of
17
a credit contract or consumer lease after, or at the time,
18
it has been entered into; and
19
(ii) the effect of the change or alteration is disadvantageous
20
to the consumer who is a debtor under the credit
21
contract or the lessee under a consumer lease because it
22
results in the avoidance of provisions of the Act that
23
would otherwise have applied for the benefit of the
24
consumer had they entered into a small amount credit
25
contract or consumer lease; and
26
(iii) the person, or a connected person, has made the change
27
or alteration:
28
(A) unilaterally; or
29
(B) without reference to, or consideration of, the
30
consumer's financial situation;
31
(b) the circumstances prescribed by the regulations.
32
(5) A person commits an offence if:
33
(a) the person is subject to a requirement under subsection (1);
34
and
35
Schedule 1 Amendments
32
National Consumer Credit Protection Amendment (Small Amount
Credit Contract and Consumer Lease Reforms) Bill 2018
No. , 2018
(b) the person engages in conduct; and
1
(c) the conduct contravenes the requirements.
2
Criminal penalty:
120 penalty units, or two years imprisonment,
3
or both.
4
Presumption of avoidance for certain schemes
5
(6) For the purposes of subsection (1) (but not for the purposes of
6
subsection (5)), if:
7
(a) the person engages in conduct of the kind referred to in
8
paragraph (1)(a) or (b) in relation to a scheme; and
9
(b) the scheme is of a kind prescribed by the regulations or
10
determined by ASIC under subsection (8);
11
then it is presumed that it would be reasonable to conclude that the
12
purpose, or one of the purposes, of the person engaging in that
13
conduct was to avoid the application of a provision of this Act.
14
(7) Subsection (6) does not apply if the person proves that, having
15
regard to the matters referred to in subsection (4), it would not be
16
reasonable to conclude that the purpose, or one of the purposes, of
17
the person engaging in that conduct was to avoid the application of
18
a provision of this Act.
19
(8) ASIC may, by legislative instrument, determine a scheme for the
20
purposes of subsection (6).
21
323D Exemption by ASIC
22
(1) ASIC may, by legislative instrument, exempt a scheme, or class of
23
schemes, from all or specified provisions of sections 323A and
24
323C.
25
(2) An exemption may apply subject to any specific conditions
26
imposed by ASIC.
27
39 Section 335A
28
Repeal the section.
29
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National Consumer Credit Protection Amendment (Small Amount
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33
40 At the end of subsection 23A(1) of the National Credit
1
Code
2
Add:
3
Note:
A penalty may be imposed for contravention of a key requirement in
4
this subsection, but only at the time the credit contract is entered into:
5
see Part 6.
6
41 At the end of subsection 31A(1) of the National Credit
7
Code
8
Repeal the note, substitute:
9
Note 1:
See section 39B for the maximum amount that may be recovered by
10
the credit provider if there is a default in payment under the contract.
11
Note 2:
A penalty may be imposed for contravention of a key requirement in
12
this subsection: see Part 6.
13
42 After section 31B of the National Credit Code
14
Insert:
15
31C Prohibition on unexpired permitted monthly fees
16
(1) A credit provider must not charge or require the payment of an
17
unexpired permitted monthly fee if:
18
(a) the debtor pays out a small amount credit contract or a small
19
amount credit contract is otherwise discharged; and
20
(b) the date of the pay out or discharge is before the day on
21
which the contract would have been paid out had the debtor
22
paid all repayments required by the contract at the times
23
required by the contract.
24
Civil penalty:
2,000 penalty units
25
(2) If a credit provider contravenes subsection (1):
26
(a) the debtor is not liable (and is taken never to have been
27
liable) to make the payment to the credit provider or person;
28
and
29
(b) the credit provider must refund any unexpired permitted
30
monthly fee paid by the debtor to the credit provider as soon
31
as practicable; and
32
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National Consumer Credit Protection Amendment (Small Amount
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(c) the debtor may recover as a debt due to the debtor the amount
1
of any payment made by the debtor to the credit provider
2
which has not been refunded in accordance with
3
paragraph (b).
4
Strict liability offence
5
(3) A person commits an offence if:
6
(a) the person is subject to a requirement under subsection (1);
7
and
8
(b) the person engages in conduct; and
9
(c) the conduct contravenes the requirement.
10
Criminal penalty:
100 penalty units.
11
(4) Subsection (3) is an offence of strict liability.
12
Note:
For strict liability, see section 6.1 of the Criminal Code.
13
43 Subsection 72(3) (paragraph (a) of the note) of the
14
National Credit Code
15
After "such as", insert "family violence,".
16
44 Subsection 82(2) of the National Credit Code
17
After "continuing credit contract", insert "or small amount credit
18
contract".
19
45 At the end of section 82 of the National Credit Code
20
Add:
21
(3) The amount required to pay out a small amount credit contract is
22
the total of the following amounts:
23
(a) the amount of credit;
24
(b) all fees and charges payable by the debtor to the credit
25
provider up to the date of termination excluding any
26
unexpired permitted monthly fee;
27
(c) reasonable enforcement expenses;
28
less any payments made under the contract and any rebate of
29
premium under section 148.
30
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46 After paragraph 111(1)(i) of the National Credit Code
1
Insert:
2
(ia) subsection 23A(1)--but only at the time the credit contract is
3
entered into;
4
(ib) subsection 31A(1);
5
47 After subsection 111(1) of the National Credit Code
6
Insert:
7
(1A) For the purposes of this Division, a key requirement in connection
8
with a consumer lease for household goods is any one of the
9
requirements of this Code contained in the following provisions:
10
(a) subsection 174(1A);
11
(b) subsection 175AA(1).
12
48 After subsection 114(1A) of the National Credit Code
13
Insert:
14
(1B) On application being made by a lessee for an order in relation to a
15
consumer lease, the maximum penalty that may be imposed by the
16
court for a contravention of a key requirement is an amount not
17
exceeding the difference between the total amount payable by the
18
lessee under the consumer lease and the base price.
19
49 At the end of section 114 of the National Credit Code
20
Add:
21
(4) For the purposes of subsection (1B), the amount payable under a
22
consumer lease to the extent it relates to amounts payable in the
23
future is to be calculated on the assumptions in sections 180 and
24
182.
25
50 Subsection 171(1) of the National Credit Code (heading)
26
Omit "or indefinite leases".
27
51 Subsection 171(1) of the National Credit Code
28
Omit all the words after "or less".
29
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52 After subsection 171(1) of the National Credit Code
1
Insert:
2
Leases for an indefinite period
3
(1A) This Part does not apply to a consumer lease for an indefinite
4
period unless:
5
(a) the lessor is a constitutional corporation; or
6
(b) the lease was entered into in the course of constitutional trade
7
and commerce; or
8
(c) the lease was entered into using postal, telegraphic,
9
telephonic, and other like services (within the meaning of
10
paragraph 51(v) of the Constitution).
11
53 After section 172 of the National Credit Code
12
Insert:
13
172A Using postal, telegraphic, telephonic and other like services to
14
enter into a consumer lease for an indefinite period
15
A lessor must not use postal, telegraphic, telephonic, and other like
16
services (within the meaning of paragraph 51(v) of the
17
Constitution) to enter into a consumer lease for an indefinite period
18
unless the lessor is a constitutional corporation.
19
54 Before subsection 174(1) of the National Credit Code
20
Insert:
21
Requirements for all consumer leases
22
55 After subsection 174(1) of the National Credit Code
23
Insert:
24
Requirements for consumer leases for household goods
25
(1A) A consumer lease for household goods must disclose, in
26
accordance with any instrument made pursuant to subsection (1B):
27
(a) the base price of the goods hired under the consumer lease;
28
and
29
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(b) the difference between the base price of the goods hired
1
under the consumer lease and the total amount payable by the
2
lessee under the lease;
3
(c) any other information required by an instrument made
4
pursuant to subsection (1B).
5
Note:
A penalty may be imposed for contravention of a key requirement in
6
this subsection: see Part 6.
7
(1B) ASIC may, by legislative instrument, determine for the purposes of
8
subsection (1A):
9
(a) further information that must be disclosed in the consumer
10
lease; and
11
(b) the form of the disclosure.
12
56 Before subsection 174(3) of the National Credit Code
13
Insert:
14
Offence
15
57 At the end of section 174 of the National Credit Code
16
Add:
17
Additional requirements for consumer leases for household goods
18
(5) Before entering into a consumer lease for household goods, a
19
lessor must provide information in accordance with any instrument
20
made pursuant to subsection (6).
21
(6) ASIC may, by legislative instrument, determine for the purposes of
22
subsection (5):
23
(a) the information that must be provided; and
24
(b) how the information is to be provided; and
25
(c) when the information is to be provided.
26
58 After section 175A of the National Credit Code
27
Insert:
28
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175AA Cap on fees and charges for consumer leases
1
(1) A lessor must not enter into a consumer lease if the sum of the
2
following two amounts is more than the permitted cap:
3
(a) the total amount payable by the lessee under the consumer
4
lease including all applicable taxes; and
5
(b) any add on fees payable by the lessee.
6
Civil penalty:
2,000 penalty units.
7
Note:
A penalty may be imposed for contravention of a key requirement in
8
this subsection. See Part 6.
9
(2) For the purposes of subsection (1), the following amounts are not
10
included in the total amount payable by the lessee under the
11
consumer lease:
12
(a) a permitted delivery fee; or
13
(b) a permitted installation fee; or
14
(c) enforcement expenses of an amount not exceeding the
15
amount which could be recovered by the lessor pursuant to
16
179R(1).
17
(3) The permitted cap is the sum of the following amounts:
18
(a) the base price of the goods hired under the consumer lease;
19
and
20
(b) the amount worked out by:
21
(i) in the case of a consumer lease for a fixed term,
22
multiplying the base price of the goods hired under the
23
consumer lease by 0.04 for each whole month of the
24
consumer lease to a maximum of 48 months; and
25
(ii) in the case of a consumer lease for an indefinite period,
26
multiplying the base price of the goods hired under the
27
consumer lease by 1.92.
28
(4) An add-on fee is any fee or charge that:
29
(a) either:
30
(i) the lessee is liable to pay to the lessor; or
31
(ii) the lessee is liable to pay to another person under an
32
agreement facilitated by or on behalf of the lessee; and
33
(b) relates to a service or product which either:
34
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(i) facilitates or complements the lessee's use of the goods
1
hired under the consumer lease; or
2
(ii) is marketed by the lessor or another person as being
3
necessary or desirable to complement the lessee's use of
4
the goods hired under the consumer lease.
5
(5) For goods that are new, the base price of the goods is:
6
(a) where the recommended retail price of the goods is known at
7
the time the consumer lease is entered into, the lesser of the
8
following amounts:
9
(i) the recommended retail price (excluding any amount on
10
account of any goods and services tax) at the time the
11
consumer lease is entered into;
12
(ii) the agreed purchase price; or
13
(b) where the recommended retail price of the goods is not
14
known at the time the consumer lease is entered into, the
15
lesser of the following amounts:
16
(i) the market value of the goods at the time that the
17
consumer lease is entered into (excluding any amount
18
on account of any goods and services tax);
19
(ii) the agreed purchase price.
20
(6) For goods that are not new, the base price of the goods is the lesser
21
of the agreed purchase price and:
22
(a) where the date of manufacture and the recommended retail
23
price of the goods at the date of manufacture is known at the
24
time the consumer lease is entered into, the recommended
25
retail price for the goods (excluding any amount on account
26
of any goods and services tax) at the date of manufacture
27
depreciated by 10% for each year or part of a year between
28
the date of manufacture and the date that the consumer lease
29
is entered into to a maximum depreciation of 30%; or
30
(b) in any other case, the market value of the goods at the time
31
the consumer lease is entered into (excluding any amount on
32
account of any goods and services tax).
33
(7) An agreed purchase price is the amount for the goods to be hired
34
under the consumer lease that is agreed, before or at the time the
35
consumer lease is entered into, by the lessee and any one of the
36
following:
37
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National Consumer Credit Protection Amendment (Small Amount
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(i) the lessor;
1
(ii) the seller of the goods; or
2
(iii) another person who facilitates the entry into the consumer
3
lease.
4
(8) A fee or charge is a permitted delivery fee if it:
5
(a) is for the delivery to the lessee of the goods hired under the
6
consumer lease; and
7
(b) is limited to the reasonable cost of delivery of the goods to
8
the lessee.
9
(9) ASIC may, by legislative instrument, declare that specified fees
10
which relate to installation of particular kinds of goods are
11
permitted installation fees.
12
175AB Other consequences of imposing fees or charges above the
13
permitted cap
14
Offence
15
(1) A person commits an offence if:
16
(a) the person is subject to a requirement under
17
subsection 175AA(1); and
18
(b) the person engages in conduct; and
19
(c) the conduct contravenes the requirement.
20
Criminal penalty:
100 penalty units.
21
Civil effect
22
(2) If a lessor enters into a consumer lease in contravention of
23
subsection 175AA(1):
24
(a) each provision (the void provisions) of the consumer lease
25
that imposes a monetary liability on the lessee in excess of
26
the base price of the goods hired under the lease (whether or
27
not the liability is imposed consistently with this Code) is
28
void to the extent that the provision relates to the liability;
29
and
30
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41
(b) the lessee may recover as a debt due to the lessee any amount
1
paid to the lessor under the void provisions to the extent that
2
the amount relates to the liability.
3
175AC Lessor or prescribed person must not require or accept
4
payment in relation to consumer lease etc.
5
(1) A lessor, or a person prescribed by the regulations, must not
6
require or accept payment in relation to a consumer lease by the
7
lessee of an amount described in paragraph 175AA(1)(a) or (b) that
8
exceeds the permitted cap in relation to that consumer lease.
9
Criminal penalty:
100 penalty units.
10
(2) If a lessor or person contravenes subsection (1):
11
(a) the lessee is not liable (and is taken never to have been liable)
12
to make the payment to the lessor or person; and
13
(b) the lessee may recover as a debt due to the lessee the amount
14
of any payment made by the lessee to the lessor or person.
15
59 Subsection 177B(3) (paragraph (a) of the note) of the
16
National Credit Code
17
After "such as", insert "family violence,".
18
60 Subsection 179(1) of the National Credit Code
19
Omit "before the end of a consumer lease".
20
61 Subsection 179(2) of the National Credit Code
21
Omit "before the end of its fixed term".
22
62 At the end of Division 10 of Part 11 of the National Credit
23
Code
24
Add:
25
179VA Canvassing of consumer leases at home
26
Requirement
27
(1) A lessor or a person who provides credit assistance must not visit a
28
place of residence for the purpose of inducing a person who resides
29
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National Consumer Credit Protection Amendment (Small Amount
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No. , 2018
there to apply for or obtain a consumer lease for household goods,
1
except by prior arrangement by the lessor or person who provides
2
credit assistance with a person who resides there.
3
Civil penalty:
2,000 penalty units.
4
Offence
5
(2) A person commits an offence if:
6
(a) the person is subject to a requirement under subsection (1);
7
and
8
(b) the person engages in conduct; and
9
(c) the conduct contravenes the requirement.
10
Criminal penalty:
100 penalty units.
11
Strict liability offence
12
(3) A person commits an offence if:
13
(a) the person is subject to a requirement under subsection (1);
14
and
15
(b) the person engages in conduct; and
16
(c) the conduct contravenes the requirement.
17
Criminal penalty:
10 penalty units.
18
(4) Subsection (3) is an offence of strict liability.
19
Note:
For strict liability, see section 6.1 of the Criminal Code.
20
Division 10A--Loss of Charges
21
179VB Loss of charges
22
(1) This section applies to a consumer lease which:
23
(a) was entered into between a lessee and a lessor in the
24
following circumstances:
25
(i) before the consumer lease was entered into, the lessor
26
had visited the lessee's place of residence in
27
contravention of section 179VA; and
28
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43
(ii) a reasonable person would conclude the consumer
1
entered into the consumer lease as a result of that visit;
2
or
3
(b) was entered into between a lessee and a lessor in the
4
following circumstances:
5
(i) the lessor knew that:
6
(A) a person who provides credit assistance had
7
visited the lessee's place of residence in
8
contravention of section 179VA; or
9
(B) an unsolicited visit by another person had been
10
made to that consumer; and
11
(ii) a reasonable person would conclude the consumer
12
entered into that consumer lease as a result of that visit.
13
(2) Each provision (the void provisions) of a consumer lease to which
14
this section applies that imposes a monetary liability on the lessee
15
in excess of the base price of the goods hired under the consumer
16
lease (whether or not the liability is imposed consistently with this
17
Code) is void to the extent that the provision relates to the liability.
18
(3) The lessee may recover as a debt due to the lessee any amount paid
19
to the lessor under the void provisions to the extent that the amount
20
relates to the liability.
21
63 Subsection 179W(1) of the National Credit Code
22
Before "Part 12", insert "Part 6 (relating to penalties for defaults)
23
(excluding subsections 111(1), 111(2), 114(1) and 114(1A)), ".
24
64 Subsection 204(1) of the National Credit Code
25
Insert:
26
base price: see subsections 175AA(5) and 175AA(6).
27
constitutional corporation means a corporation to which
28
paragraph 51(xx) of the Constitution applies.
29
constitutional trade and commerce means trade and commerce:
30
(a) between Australia and places outside Australia; or
31
(b) between the States; or
32
(c) between a State and a Territory; or
33
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National Consumer Credit Protection Amendment (Small Amount
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No. , 2018
(d) between 2 Territories; or
1
(e) within a Territory.
2
consumer lease for household goods means a consumer lease
3
where any of the goods hired under the lease are household goods.
4
credit assistance has the same meaning as in section 8 of the
5
National Credit Act.
6
household goods means goods of a kind ordinarily acquired for
7
domestic or household use but does not include motor vehicles.
8
permitted cap: see subsection 175AA(3).
9
65 Subsection 204(1) of the National Credit Code (definition
10
of market value)
11
After "credit contract", insert "or consumer lease".
12
66 Subsection 204(1) of the National Credit Code
13
Insert:
14
unexpired permitted monthly fee is, in respect of a small amount
15
credit contract, each permitted monthly fee that is in respect of a
16
month that commences after the date of pay out or other discharge
17
of that contract.
18
unsolicited visit by another person means a visit to a person by
19
another person (the second person) that the second person would
20
have been prohibited from making under section 179VA had the
21
second person been a lessor or a person who provides credit
22
assistance.
23