(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(d) neither the request, nor the agreement to the request, has been withdrawn in accordance with this section.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.
Division 7—Calculation of interest under credit card contracts
133BS Credit provider not to impose retrospective interest charges
Requirement
(1) A licensee who is the credit card provider under a credit card contract must not, in relation to a statement period covered by a statement of account, impose on the consumer who is the debtor under the contract a liability to pay a rate of interest if the rate of interest would:
(a) be applied to the balance, or a part of the balance, of the credit card contract on a day in the statement period; and
(b) be applied because of facts or circumstances coming into existence after that day; and
(c) be higher than the rate of interest (including nil) that would have been applied to that balance, or that part of the balance, on that day if those facts and circumstances had not come into existence.
Civil penalty: 5,000 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 8—Ending credit card contracts
133BT Credit provider not to enter into credit card contract unless it allows for termination of contracts
Requirement
(1) A licensee must not enter into, or offer to enter into, a credit card contract under which the licensee would be the credit provider, if the consumer who would be the debtor under the contract would not have a credit card termination entitlement under the contract.
Civil penalty: 5,000 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.
Meaning of credit card termination entitlement
(3) A consumer who is the debtor under a credit card contract has a credit card termination entitlement under the contract if the consumer is entitled, under the contract, to terminate the credit card contract.
133BU Credit provider to provide online capacity to request termination of credit card contract
When this section applies
(1) This section applies if a consumer who is the debtor under a credit card contract has a credit card termination entitlement under the contract on a day (the online termination day).
Requirement
(2) The licensee who is the credit provider under the credit card contract must establish and maintain a website that satisfies all of the following paragraphs:
(a) the website tells the consumer that the consumer may use the website to request to terminate the credit card contract;
(b) the website:
(i) tells the consumer what information the consumer will need to enter in order to request to terminate the credit card contract; and
(ii) provides the consumer with instructions on how to request to terminate the credit card contract;
(c) if the consumer enters the information and follows those instructions, the consumer can use the website to request to terminate the credit card contract;
(d) the website is available on the online termination day.
Civil penalty: 5,000 penalty units.
Defence
(3) For the purposes of subsection (2), it is a defence if the website is reasonably unavailable on the online termination day.
133BV Credit provider not to suggest the consumer not terminate the credit card contract
When this section applies
(1) This section applies if:
(a) a consumer who is the debtor under a credit card contract has a credit card termination entitlement under the contract; and
(b) the consumer has requested to terminate the credit card contract.
Requirement
(2) The licensee who is the credit provider under the credit card contract must not suggest that the consumer remain in the credit card contract.
Civil penalty: 5,000 penalty units.
Offence
(3) 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: 50 penalty units.
133BW Credit provider to give effect to request to terminate credit card contract
When this section applies
(1) This section applies if:
(a) a consumer who is the debtor under a credit card contract has a credit card termination entitlement under the contract; and
(b) the consumer has requested to terminate the consumer’s credit card contract.
Requirement
(2) The licensee who is the credit provider under the credit card contract must take reasonable steps to ensure that the request is given effect to as soon as practicable.
Civil penalty: 5,000 penalty units.
Offence
(3) 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: 50 penalty units.
Part 3‑2BA—Licensees that are credit providers under credit contracts: additional rules relating to low cost credit contracts
Division 1—Introduction
133BX Guide to this Part
This Part has rules that apply to certain licensees who are, or are to be, credit providers under certain low cost credit contracts. It applies in addition to the general rules in Part 3‑2, and modifies some of those rules.
Division 1 provides that a licensee may elect that this Part apply to the licensee in relation to some or all low cost credit contracts. This Part only applies to a licensee who has made an election, and only applies to such a licensee in relation to low cost credit contracts covered by the election.
Division 2 modifies how some of the general rules in Part 3‑2 apply to a licensee who has made an election. These modifications affect the rules that deal with the obligations of the licensee:
(a) to assess whether a low cost credit contract will be unsuitable for a consumer before doing particular things in relation to the contract; and
(b) not to enter, or increase the credit limit of, a low cost credit contract that is unsuitable for a consumer.
Division 3 requires a licensee who has made an election to have a policy (called an unsuitability assessment policy) that sets out how the licensee will comply with the licensee’s obligation under Part 3‑2 to assess whether a low cost credit contract will be unsuitable for a consumer.
133BXA Scope of this Part
This Part applies if licensee makes election
(1) A licensee may, in writing, elect that this Part apply to the licensee in relation to:
(a) all low cost credit contracts; or
(b) each low cost credit contract in a specified class of low cost credit contracts.
(2) This Part:
(a) applies to a licensee if the licensee has made an election under subsection (1) and the election is in force; and
(b) applies to such a licensee in relation to a credit contract if the credit contract is a low cost credit contract covered by the election.
(3) An election made under subsection (1) remains in force until the licensee revokes the election.
Licensee must keep copy of election and revocation
(4) A licensee who makes an election under subsection (1) must keep a written copy of the election for the period:
(a) starting at the time when licensee makes the election; and
(b) ending 6 years after the day on which the election ceases to be in force.
(5) If a licensee revokes an election made under subsection (1), then the licensee must keep a written copy of the revocation for the period of 6 years after the day on which the licensee revokes the election.
Part 3‑2 not otherwise affected
(6) Nothing in this Part affects how Part 3‑2 applies to a licensee in relation to a credit contract if the licensee has not made an election under subsection (1) of this section that covers the contract.
Division 2—Unsuitable low cost credit contracts
133BXB When inquiries etc. must be made
For the purposes of applying section 128 to a licensee in relation to a low cost credit contract:
(a) paragraphs 128(aa) and (ba) are to be disregarded; and
(b) the period for making the assessment mentioned in paragraph 128(c), and the inquiries and verification mentioned in paragraph 128(d), is taken to be the period of 90 days (or other period prescribed by the regulations for the purposes of this paragraph) ending immediately before the licensee starts to do the thing mentioned in paragraph 128(a) or (b) (whichever applies).
133BXC When inquiries etc. are reasonable
(1) This section applies to a licensee who:
(a) enters a low cost credit contract with a consumer who will be the debtor under the contract; or
(b) increases the credit limit of a low cost credit contract with a consumer who is the debtor under the contract.
Note: The licensee must also have elected under subsection 133BXA(1) that this Part apply to the licensee in relation to the low cost credit contract: see subsection 133BXA(2).
Relevant matters
(2) In determining whether the licensee has:
(a) made reasonable inquiries about the consumer’s requirements and objectives in relation to the low cost credit contract, as required under paragraph 130(1)(a); and
(b) made reasonable inquiries about the consumer’s financial situation, as required under paragraph 130(1)(b); and
(c) taken reasonable steps to verify the consumer’s financial situation, as required under paragraph 130(1)(c);
regard must be had to the matters covered by subsection (3) of this section, and regard may be had to any other relevant matters.
Note: Regulations made for the purposes of subsection 130(2) may prescribe particular inquiries or steps that must be made or taken, or that do not need to be made or taken, for the purposes of paragraph 130(1)(a), (b) or (c).
(3) The matters covered by this subsection are the following:
(a) the nature of the low cost credit contract (including the terms of the contract and the type and amount of credit provided under the contract);
(b) if there is a target market determination (within the meaning of the Corporations Act 2001) for the low cost credit contract—the nature of the target market for the low cost credit contract, as described in that determination;
(c) whether the consumer is financially vulnerable;
(d) whether the licensee has any procedures in place to reduce the risk of the licensee providing credit to a consumer on terms that are not affordable for the consumer;
(e) whether the licensee has any procedures in place to mitigate the harm that may be caused to a consumer if the licensee provides credit to the consumer on terms that are not affordable for the consumer;
(f) any matters prescribed by the regulations.
Note: The particular things that a licensee must do in order to satisfy the licensee’s obligations under paragraphs 130(1)(a) to (c) in relation to low cost credit contracts may vary from case to case, and may be less onerous in some cases than in others, depending on matters such as those covered by this subsection.
133BXD Assessments etc. in relation to larger contracts
(1) This section applies to a licensee who enters a low cost credit contract (the initial contract) with a consumer who will be the debtor under the contract.
Entering the initial contract
(2) The licensee may satisfy paragraphs 128(c) and (d) in relation to entering the initial contract by (respectively):
(a) making an assessment that would satisfy paragraph 128(c) in relation to entering a larger contract with the consumer; and
(b) making inquiries and verification that would satisfy paragraph 128(d) in relation to entering the larger contract with the consumer.
Note: For larger contract, see subsection (7).
Subsequent credit increases
(3) Subsection (4) applies if:
(a) the licensee satisfies paragraphs 128(c) and (d) in relation to entering the initial contract by:
(i) making an assessment (the initial assessment) that would satisfy paragraph 128(c) in relation to entering, with the consumer, a larger contract with a particular credit limit (the maximum credit limit); and
(ii) making inquiries and verification (the initial inquiries and verification) that would satisfy paragraph 128(d) in relation to entering the larger contract with the consumer; and
(b) the initial assessment is an assessment that the larger contract will not be unsuitable for the consumer if the larger contract is entered in the period covered by the initial assessment.
(4) If the licensee subsequently, within the protected period, makes a protected increase to the credit limit of the initial contract, then:
(a) the licensee is taken to satisfy section 128 in relation to the protected increase (regardless of whether the initial assessment, and the initial inquiries and verification, were made within the period that applies in relation to the protected increase under that section); and
(b) the initial assessment is taken to be:
(i) an assessment that covers the protected period; and
(ii) an assessment that the initial contract will not be unsuitable for the consumer if the protected increase is made in the protected period.
Note 1: For protected increase and protected period, see subsection (7).
Note 2: Even if the licensee is taken under this subsection to satisfy section 128 in relation to the protected increase, it is still possible for the licensee to contravene subsection 131(1) or 133(1) in relation to the protected increase.
Exceptions
(5) Subsection (4) does not apply to the licensee in relation to the protected increase if, at the time when the protected increase is made, the licensee has information on the basis of which it would be reasonable to conclude that the credit contract is likely to be unsuitable for the consumer if the protected increase is made.
(6) Despite subsections (3) and (4):
(a) the licensee may, at any time after making the initial assessment and before making the protected increase, make a new assessment in relation to the protected increase for the purposes of paragraph 128(c); and
(b) if the licensee does so, then subsection (4) of this section does not apply to the licensee in relation to the protected increase.
Definitions
(7) In this section:
larger contract means a low cost credit contract that:
(a) has a credit limit that is greater than the credit limit of the initial contract when the initial contract is entered; and
(b) has terms that are otherwise substantially the same as the terms of the initial contract when the initial contract is entered.
protected increase: an increase to the credit limit of the initial contract is a protected increase if:
(a) after the increase, the initial contract has a credit limit that is no greater than the maximum credit limit (within the meaning of subparagraph (3)(a)(i)); and
(b) the terms of the initial contract after the increase are otherwise substantially the same as the terms of the initial contract immediately before the increase.
protected period means whichever of the following is shorter (disregarding paragraph (4)(b)):
(a) the period covered by the initial assessment;
(b) the period of 2 years beginning when the period covered by the initial assessment begins.
133BXE Assessments of low cost credit contracts—presumptions where credit limit of contract not above threshold amount