National Consumer Credit Protection Act 2009

CHAPTER 3 - RESPONSIBLE LENDING CONDUCT  

PART 3-3 - LICENSEES THAT PROVIDE CREDIT ASSISTANCE IN RELATION TO CONSUMER LEASES  

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

SECTION 147   PROHIBITION ON SUGGESTING TO CONSUMERS TO REMAIN IN UNSUITABLE CONSUMER LEASES  
Prohibition on suggesting to remain in unsuitable lease

147(1)    

A licensee must not provide credit assistance to a consumer by suggesting that the consumer remain in a particular consumer lease with a particular lessor if the lease is unsuitable for the consumer under subsection (2).

Civil penalty: 5,000 penalty units.

When the lease is unsuitable

147(2)    
The lease is unsuitable for the consumer if, at that time the licensee provides the credit assistance:

(a) the consumer is, or is likely to be, unable to comply with the consumer ' s financial obligations under the lease, or only able to comply with substantial hardship; or

(b) the lease does not meet the consumer ' s requirements or objectives; or

(c) if the regulations prescribe circumstances in which a consumer lease is unsuitable - those circumstances apply to the lease.

147(3)    
For the purposes of paragraph (2)(a), it is presumed that, if the consumer could only comply with the consumer ' s financial obligations under the lease by selling the consumer ' s principal place of residence, the consumer could only comply with those obligations with substantial hardship, unless the contrary is proved.

Information to be used to determine if lease is unsuitable

147(4)    
For the purposes of determining under subsection (2) whether the lease is unsuitable, only information that satisfies both of the following paragraphs is to be taken into account:

(a) the information is about the consumer ' s financial situation, requirements or objectives, or any other matter prescribed by the regulations under paragraph 140(1)(d) or (e) ;

(b) at the time the licensee provides the credit assistance:

(i) the licensee had reason to believe that the information was true; or

(ii) the licensee would have had reason to believe that the information was true if the licensee had made the inquiries or verification under section 140 .

Consumer lease not unsuitable under regulations

147(5)    
The regulations may prescribe particular situations in which a consumer lease is taken not to be unsuitable for a consumer, despite subsection (2).

Offence

147(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: 2 years imprisonment.

Defence

147(7)    
For the purposes of subsections (1) and (6), it is a defence if:

(a) the licensee suggested that the consumer remain in the consumer lease because the licensee reasonably believed that there was no other consumer lease that was not unsuitable for the consumer; and

(b) the licensee informed the consumer that there is a procedure under sections 177B and 179H 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 ).

147(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).