National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Act 2011 (84 of 2011)
Schedule 1 Amendments
Part 2 Amendments relating to credit cards
National Consumer Credit Protection Act 2009
19 After Part 3-2A
Insert:
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.