Requirement not to provide certain benefRequirement not to provide certain benefits

Requirement not to provide certain benefits

(2) Subject to subsections (3) and (4), a regulated person must not:
(a) in any case—give; or
(b) if paragraph (1)(b) applies—engage in conduct that results in another regulated person giving;
the introducer under the flexible credit cost arrangement or an associated person any benefit, whether monetary or non-monetary, if:
(c) the amount of the benefit is determined by, or varies by reference to, (in whole or in part):
(i) in the case of a credit contract—the annual percentage rate under the contract; and
(ii) in the case of a consumer lease—the amount (rental charge) by which the rental payable under the lease exceeds the cash price of the goods; and
(d) the introducer or an associated person has determined, proposed or influenced the amount of the annual percentage rate or rental charge (as the case may be).
Note: See the definition of determines, proposes or influences for various circumstances that do not amount to determining, proposing or influencing the amount of the annual percentage rate or rental charge.
Civil penalty: 2,000 penalty units.
(3) Subsection (2) does not apply to a benefit that is determined by, or varies by reference to, an annual percentage rate or rental charge if:
(a) in the case of an annual percentage rate—both the following are satisfied:
(i) the annual percentage rate is not more than the annual percentage rate (specified rate) specified by a regulated person:
(A) before any determination, proposal or influence referred to in paragraph (2)(d); and
(B) as the maximum annual percentage rate that may apply with respect to the credit contract; and
(ii) either:
(A) the annual percentage rate is not less than the rate (base rate) that is 200 basis points less than the specified rate;
(B) otherwise—the amount of the benefit is equal to the amount that would be payable if the annual percentage rate were the base rate; or
(b) in the case of a rental charge—both the following are satisfied:
(i) the rental charge is not more than the amount of the rental charge (specified rental charge) specified by a regulated person:
(A) before any determination, proposal or influence referred to in paragraph (2)(d); and
(B) as the maximum rental charge that may apply with respect to the consumer lease; and
(ii) either:
(A) the rental charge is not less than the amount (base amount) that is 4% less than the specified rental charge;
(B) otherwise—the amount of the benefit is equal to the amount that would be payable if the rental charge were the base amount.

(4) Subsection (2) does not apply to a benefit given by a regulated person to any of the following: (a) a director or employee of the regulated person; (b) a related body corporate of the regulated person; (c) a director or employee of a related body corporate of the regulated person. Offence (5) A person commits an offence if: (a) the person is subject to a requirement under subsection (2); and (b) the person engages in conduct; and (c) the conduct contravenes the requirement. Criminal penalty: 100 penalty units, or 2 years imprisonment, or both. 53B Obligation in relation to certain fees and charges (1) Subject to subsection (5), a regulated person must not: (a) in any case—give; or (b) if paragraph 53A(1)(b) applies—engage in conduct that results in another regulated person giving; the introducer under the flexible credit cost arrangement or an associated person any benefit, whether monetary or non-monetary, in relation to a credit contract or consumer lease if the following fees and charges exceed the specified fees and charges: (c) in the case of a credit contract—credit fees and charges that are payable to the introducer, or an associated person, where the introducer or associated person is providing credit services in relation to the credit contract and is: (i) providing the credit services as a representative of the credit provider for the credit contract; or (ii) a linked supplier of the credit provider; (d) in the case of a consumer lease—consumer lease fees and charges that are payable to the introducer, or an associated person, where the introducer or associated person is providing credit services in relation to the consumer lease and is: (i) providing the credit services as a representative of the lessor under the lease; or (ii) a linked supplier of the lessor. Note: This would cover fees commonly described as “dealer origination fees” or “dealer administration fees” that enable the person providing credit services to recoup costs associated with providing those services. Civil penalty: 2,000 penalty units. (2) In this section, specified fees and charges means, in relation to a credit contract or consumer lease, the greater of $0 and the amount (if any) specified by a regulated person: (a) before any determination, proposal or influence referred to in paragraph 53A(2)(d); and (b) as the maximum amount of credit fees and charges or consumer lease fees and charges in respect of the credit contract or consumer lease that are of the type referred to in paragraph (1)(c) or (d). (3) Subject to subsection (5), the regulated person must not determine the amount of the specified fees and charges by reference to the loss or potential loss of revenue to the introducer, or an associated person, resulting from section 53A affecting the manner in which a benefit is able to be determined. Civil penalty: 2,000 penalty units. (4) Subject to subsection (5), a regulated person must keep written records of the basis for determining any specified fees and charges specified by the regulated person for a period of 7 years. Civil penalty: 2,000 penalty units. (5) Subsections (1), (3) and (4) do not apply in relation to a benefit given by a regulated person to any of the following: (a) a director or employee of the regulated person; (b) a related body corporate of the regulated person; (c) a director or employee of a related body corporate of the regulated person. Offence (6) A person commits an offence if: (a) the person is subject to a requirement under subsection (1), (3) or (4); and (b) the person engages in conduct; and (c) the conduct contravenes the requirement. Criminal penalty: 100 penalty units, or 2 years imprisonment, or both.”.

Part 3—Transitional

6 Application

This instrument does not apply in relation to:

(a) a credit activity that was engaged in before this instrument commences; or

(b) a credit contract or a consumer lease that was entered into:

(i) before this instrument commences; or

(ii) before 1 February 2019 as a result of:

(A) an offer that was made by the credit provider or lessor before this instrument commences; or

(B) an acceptance by the credit provider or lessor before 1 February 2019 of an offer made by the consumer before this instrument commences.