Financial Sector Reform Act 2022 (87 of 2022)

Schedule 4   Consumer credit reforms

Part 2   Consumer leases

National Consumer Credit Protection Act 2009

26   At the end of Part 3-4

Add:

Division 5 - Special rules for consumer leases for household goods

156A Licensee who makes representations about consumer leases for household goods must display and give information

Requirement

(1) If a licensee represents that the licensee enters into, or is able to enter into, consumer leases for household goods with consumers under which the licensee would be the lessor, the licensee must:

(a) display information; and

(b) give information to consumers;

in accordance with any determination made be 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.

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: 50 penalty units.

156B Licensee must not enter into a consumer lease for household goods if the payments do not meet the prescribed requirements

Requirement

(1) A licensee must not enter into, or offer to enter into, a consumer lease for household goods with a consumer who will be the lessee under the lease if the amount that would be required to be paid under the lease by the lessee would not meet the requirements prescribed by the regulations.

Civil penalty: 5,000 penalty units.

Note: For example, the regulations may provide that the amount of a payment must not exceed a specified percentage of the lessee's income.

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.

Loss of certain amounts

(3) If the licensee enters into a consumer lease for household goods in contravention of subsection (1), then:

(a) the lessee is not liable (and is taken never to have been liable) to pay any amount under that consumer lease that exceeds the base price of the goods hired under that consumer lease (whether or not the liability is imposed consistently with the National Credit Code); and

(b) the lessee may recover as a debt due to the lessee any amounts paid by the lessee that, in accordance with paragraph (a) of this subsection, the lessee is not liable to pay (or is taken never to have been liable to pay).

156C Written documentation required in relation to the assessment for a consumer lease for household goods

(1) If, in an assessment made for the purposes of paragraph 151(c), the licensee assesses that a consumer lease for household goods is not unsuitable for a consumer, before:

(a) entering into the consumer lease with the consumer; or

(b) making an unconditional representation to the consumer that the licensee considers that the consumer is eligible to enter a consumer lease with the licensee;

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

(c) the assessment; and

(d) the inquiries and verification made for the purposes of paragraph 151(d) in relation to that assessment.

Civil penalty: 5,000 penalty units.

(2) ASIC may, by legislative instrument, determine the form in which the matters in paragraphs (1)(c) and (d) 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.