Financial Sector Reform Act 2022 (87 of 2022)

Schedule 4   Consumer credit reforms

Part 1   Small amount credit contracts

National Consumer Credit Protection Act 2009

6   Section 124B

Repeal the section, substitute:

124B Licensee who makes representations about credit assistance in relation to small amount credit contracts must display and give information

Requirement

(1) If a licensee represents that the licensee provides, or is able to provide, credit assistance to consumers in relation to small amount credit contracts, the licensee must:

(a) display information; and

(b) give information to consumers;

in accordance with any determination made by ASIC under subsection (2).

Civil penalty: 5,000 penalty units.

(2) ASIC may, by legislative instrument, determine one or more of the following matters relating to licensees that make representations described in subsection (1):

(a) the information that the licensees must display;

(b) how the licensees must display the information;

(c) when the licensees must display the information;

(d) the information that the licensees must give to consumers;

(e) how the licensees must give the information to consumers;

(f) when the licensees must give the information to consumers.

(3) In making the determination under subsection (2), ASIC must take into account the risks associated with small amount credit contracts and the alternatives that may be available to consumers.

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: 50 penalty units.

124C Written documentation required in relation to the preliminary assessment for a small amount credit contract

(1) If, in a preliminary assessment made for the purposes of paragraph 115(1)(c) or (2)(a), the licensee assesses that a small amount credit contract is not unsuitable for a consumer, before providing credit assistance to the consumer by:

(a) suggesting that the consumer apply, or assisting the consumer to apply, for the small amount credit contract; or

(b) suggesting that the consumer apply, or assisting the consumer to apply, for the increase to the credit limit of the small amount credit contract which is the subject of that preliminary assessment; or

(c) suggesting that the consumer remain in the small amount credit contract;

the licensee must document in writing and in accordance with any requirements determined by ASIC under subsection (2):

(d) the preliminary assessment; and

(e) the inquiries and verification made for the purposes of paragraph 115(1)(d) or (2)(b) in relation to that preliminary assessment.

Civil penalty: 5,000 penalty units.

(2) ASIC may, by legislative instrument, determine the form in which the matters in paragraphs (1)(d) and (e) are to be documented in writing.

(3) Before making a determination under subsection (2), ASIC must:

(a) consult the Information Commissioner in relation to matters that relate to the privacy functions (within the meaning of the Australian Information Commissioner Act 2010); and

(b) have regard to any submissions made by the Information Commissioner because of that consultation.