Consumer Credit Legislation Amendment (Enhancements) Act 2012 (130 of 2012)

Schedule 2   Reverse mortgages

Part 3   Provisions applying to credit providers generally

National Consumer Credit Protection Act 2009

21   Subsections 88(1) and (2) of the National Credit Code

Repeal the subsections, substitute:

Enforcement of credit contract

(1) A credit provider must not begin enforcement proceedings against a debtor in relation to a credit contract unless:

(a) the debtor is in default under the credit contract; and

(b) the credit provider has given the debtor, and any guarantor, a default notice, complying with this section, allowing the debtor a period of at least 30 days from the date of the notice to remedy the default; and

(c) the default has not been remedied within that period; and

(d) if the credit contract is for a reverse mortgage, the credit provider has spoken to one of the following persons by telephone or in person in that period and has thus both confirmed that the debtor received the default notice and informed the person of the consequences of failure to remedy the default, or has made reasonable efforts to do so:

(i) the debtor;

(ii) a practising lawyer representing the debtor;

(iii) a person with a power of attorney relating to the debtor's financial affairs.

Criminal penalty: 50 penalty units.

Note: If a debtor or guarantor has given a credit provider a hardship notice or a postponement request there may be extra requirements that the credit provider must comply with before beginning enforcement proceedings: see sections 89A and 94.

Enforcement of mortgage

(2) A credit provider must not begin enforcement proceedings against a mortgagor to recover payment of money due or take possession of, sell, appoint a receiver for or foreclose in relation to property subject to a mortgage, unless:

(a) the mortgagor is in default under the mortgage; and

(b) the credit provider has given the mortgagor a default notice, complying with this section, allowing the mortgagor a period of at least 30 days from the date of the notice to remedy the default; and

(c) the default has not been remedied within that period.

(d) if the mortgage secures an obligation under a credit contract for a reverse mortgage, the credit provider has spoken to one of the following persons by telephone or in person in that period and has thus both confirmed that the mortgagor received the default notice and informed the person of the consequences of failure to remedy the default, or has made reasonable efforts to do so:

(i) the mortgagor;

(ii) a practising lawyer representing the mortgagor;

(iii) a person with a power of attorney relating to the mortgagor's financial affairs.

Criminal penalty: 50 penalty units.

Note: If a mortgagor has given a credit provider a postponement request there may be extra requirements that the credit provider must comply with before beginning enforcement proceedings: see section 94.