Financial Sector Reform Act 2022 (87 of 2022)

Schedule 4   Consumer credit reforms

Part 2   Consumer leases

National Consumer Credit Protection Act 2009

42   Sections 116 to 119 of the National Credit Code

Repeal the sections, substitute:

116 Penalty if application made by credit provider, lessor or ASIC

(1) On application being made by a credit provider, a lessor or ASIC for an order, the maximum penalty that may be imposed by the court for a contravention of a key requirement relating to a contract affected by the application is an amount calculated so that the total penalty for all contraventions of the requirement in Australia (as disclosed by the credit provider or lessor) does not exceed 5,000 penalty units.

(2) However, section 167B of the National Credit Act applies in the same way in relation to the contravention of a key requirement as it would apply in relation to a civil penalty provision under that Act.

117 Payment of penalty

An amount of penalty ordered by the court to be paid on an application for an order made by a credit provider, a lessor or ASIC must be paid by the credit provider or lessor to ASIC on behalf of the Commonwealth.

118 Compensation for debtor, lessee or guarantor

(1) The court may, on application by a debtor, a lessee or a guarantor, order that the credit provider or lessor pay to the debtor, lessee or guarantor an amount by way of compensation for loss arising from the contravention of a key requirement.

(2) The court may only order an amount to be paid by way of compensation if the debtor, lessee or guarantor satisfies the court that the debtor, lessee or guarantor has suffered a loss arising from the contravention. The amount of compensation is not to exceed the amount of the loss.

(3) The court may not make an order under this section if the debtor, lessee or guarantor has previously obtained or been refused a penalty referred to in section 115 relating to the same contravention.

(4) An amount payable under this section does not affect the amount of a penalty for the purposes of section 116.

119 General provisions relating to applications by credit providers, lessors or ASIC

(1) An application for an order by a credit provider, a lessor or ASIC:

(a) may apply to any one or more credit contracts or consumer leases; and

(b) may apply to all or any class of credit contracts entered into by the credit provider or lessor during a specified period (for example, all credit contracts entered into during a specified period which are affected by a specified contravention).

(2) The court may require notice of any such application to be published by notice, in a form approved by the court, in a newspaper circulating throughout one or more States or Territories, as the court determines.

(3) Notice of an application by a credit provider or lessor must be given by the credit provider or lessor to ASIC.