(1) For a preliminary assessment under subsection 139(1) about entering a consumer lease, the licensee must assess that the lease will be unsuitable for the consumer if the lease will be unsuitable for the consumer under subsection (2).
Civil penalty: 5,000 penalty units.
Note: Even if the lease will not be unsuitable for the consumer under subsection (2), the licensee may still assess that the lease will be unsuitable for other reasons.
Particular circumstances when the lease will be unsuitable
(2) The lease will be unsuitable for the consumer if, at the time of the preliminary assessment, it is likely that:
(a) the consumer will be unable to comply with the consumer’s financial obligations under the lease, or could only comply with substantial hardship, if the lease is entered in the period proposed for it to be entered; or
(b) the lease will not meet the consumer’s requirements or objectives if the lease is entered in the period proposed for it to be entered; or
(c) if the regulations prescribe circumstances in which a consumer lease is unsuitable—those circumstances will apply to the lease if the lease is entered in the period proposed for it to be entered.
(3) For the purposes of paragraph (2)(a), it is presumed that, if the consumer could only comply with the consumer’s financial obligations under the lease by selling the consumer’s principal place of residence, the consumer could only comply with those obligations with substantial hardship, unless the contrary is proved.
Information to be used to determine if lease will be unsuitable
(4) For the purposes of determining under subsection (2) whether the lease will be unsuitable, only information that satisfies both of the following paragraphs is to be taken into account:
(a) the information is about the consumer’s financial situation, requirements or objectives, or any other matter prescribed by the regulations under paragraph 140(1)(d) or (e);
(b) at the time of the preliminary assessment:
(i) the licensee had reason to believe that the information was true; or
(ii) the licensee would have had reason to believe that the information was true if the licensee had made the inquiries or verification under section 140.
142 When the consumer lease must be assessed as unsuitable—remaining in lease
Requirement to assess the lease as unsuitable
(1) For a preliminary assessment under subsection 139(2) about remaining in a consumer lease, the licensee must assess that the lease will be unsuitable for the consumer if the lease will be unsuitable for the consumer under subsection (2).
Civil penalty: 5,000 penalty units.
Note: Even if the lease will not be unsuitable for the consumer under subsection (2), the licensee may still assess that the lease will be unsuitable for other reasons.
Particular circumstances when the lease will be unsuitable
(2) The lease will be unsuitable for the consumer if, at the time of the preliminary assessment, it is likely that:
(a) the consumer will be unable to comply with the consumer’s financial obligations under the lease, or could only comply with substantial hardship if the consumer remains in the lease in the period covered by the preliminary assessment; or
(b) the lease will not meet the consumer’s requirements or objectives if the consumer remains in the lease in the period covered by the preliminary assessment; or
(c) if the regulations prescribe circumstances in which a consumer lease is unsuitable—those circumstances will apply to the lease if the consumer remains in the lease in the period covered by the preliminary assessment.
(3) For the purposes of paragraph (2)(a), it is presumed that, if the consumer could only comply with the consumer’s financial obligations under the lease by selling the consumer’s principal place of residence, the consumer could only comply with those obligations with substantial hardship, unless the contrary is proved.
Information to be used to determine if lease will be unsuitable
(4) For the purposes of determining under subsection (2) whether the lease will be unsuitable, only information that satisfies both of the following paragraphs is to be taken into account:
(a) the information is about the consumer’s financial situation, requirements or objectives, or any other matter prescribed by the regulations under paragraph 140(1)(d) or (e);
(b) at the time of the preliminary assessment:
(i) the licensee had reason to believe that the information was true; or
(ii) the licensee would have had reason to believe that the information was true if the licensee had made the inquiries or verification under section 140.
143 Providing the consumer with the preliminary assessment
Requirement to give assessment if requested
(1) If the consumer requests the licensee for a copy of the preliminary assessment within 7 years of the date of the credit assistance quote under section 137, the licensee must give the consumer a written copy of the assessment:
(a) if the request is made within 2 years of the quote—before the end of 7 business days after the day the licensee receives the request; and
(b) otherwise—before the end of 21 business days after the day the licensee receives the request.
Note: The licensee is not required to give the consumer a copy of the preliminary assessment if the licensee does not provide credit assistance to the consumer.
Civil penalty: 5,000 penalty units.
Manner of giving assessment
(2) The licensee must give the consumer the copy of the assessment in the manner (if any) prescribed by the regulations.
No payment for assessment
(3) The licensee must not request or demand payment of an amount for giving the consumer a copy of the preliminary assessment.
Civil penalty: 5,000 penalty units.
Strict liability offence
(4) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1) or (3); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units.
(5) Subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Division 5—Fees, indirect remuneration etc. relating to consumer leases
144 Fees, indirect remuneration etc. relating to consumer leases
Requirement for disclosure
(1) A licensee must, at the same time as providing credit assistance to a consumer by:
(a) suggesting that the consumer apply, or assisting the consumer to apply, for a particular consumer lease with a particular lessor; or
(b) suggesting that the consumer remain in a particular consumer lease with a particular lessor;
give the consumer a lease proposal disclosure document in accordance with subsection (2).
Civil penalty: 5,000 penalty units.
(2) The lease proposal disclosure document must contain the following:
(a) the total amount of any fees or charges that the consumer is liable to pay to the licensee in relation to the consumer lease and the method used for working out that amount;
(b) a reasonable estimate of the total amount of any indirect remuneration that the licensee, or an employee, director or credit representative of the licensee, is likely to receive in relation to the consumer lease and the method used for working out that amount;
(c) a reasonable estimate of the total amount of any fees or charges that the consumer is likely to be liable to pay to the lessor in relation to applying for the consumer lease;
(d) a reasonable estimate of the total amount of any fees or charges that the consumer is likely to be liable to pay to another person in relation to applying for the consumer lease.
(3) For the purposes of paragraph (2)(b), the regulations may prescribe:
(a) the method for working out amounts of indirect remuneration; and
(b) how amounts of indirect remuneration must be described.
Manner of giving lease proposal disclosure document
(4) The licensee must give the lease proposal disclosure document to the consumer in the manner (if any) prescribed by the regulations.
145 No profiting from fees etc. paid to third parties
Requirement not to profit
(1) If, in the course of providing credit assistance to a consumer in relation to a consumer lease, a licensee pays an amount (the third party amount) to another person on behalf of the consumer, the licensee must not request or demand payment of an amount, as reimbursement for the third party amount, that exceeds the third party amount.
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: 6 months imprisonment.
Division 6—Prohibition on suggesting, or assisting with, unsuitable consumer leases
146 Prohibition on suggesting, or assisting with, unsuitable consumer leases
Prohibition on suggesting, or assisting with, unsuitable leases
(1) A licensee must not provide credit assistance to a consumer by:
(a) suggesting that the consumer apply for a particular consumer lease with a particular lessor; or
(b) assisting the consumer to apply for a particular consumer lease with a particular lessor;
if the lease will be unsuitable for the consumer under subsection (2).
Civil penalty: 5,000 penalty units.
When the lease will be unsuitable
(2) The lease will be unsuitable for the consumer if, at the time the licensee provides the credit assistance, it is likely that:
(a) the consumer will be unable to comply with the consumer’s financial obligations under the lease, or could only comply with substantial hardship, if the lease is entered in the period proposed for it to be entered; or
(b) the lease will not meet the consumer’s requirements or objectives if the lease is entered in the period proposed for it to be entered; or
(c) if the regulations prescribe circumstances in which a consumer lease is unsuitable—those circumstances will apply to the lease if the lease is entered in the period proposed for it to be entered.
(3) For the purposes of paragraph (2)(a), it is presumed that, if the consumer could only comply with the consumer’s financial obligations under the lease by selling the consumer’s principal place of residence, the consumer could only comply with those obligations with substantial hardship, unless the contrary is proved.
Information to be used to determine if lease will be unsuitable
(4) For the purposes of determining under subsection (2) whether the lease will be unsuitable, only information that satisfies both of the following paragraphs is to be taken into account:
(a) the information is about the consumer’s financial situation, requirements or objectives, or any other matter prescribed by the regulations under paragraph 140(1)(d) or (e);
(b) at the time the licensee provides the credit assistance:
(i) the licensee had reason to believe that the information was true; or
(ii) the licensee would have had reason to believe that the information was true if the licensee had made the inquiries or verification under section 140.
Consumer lease not unsuitable under regulations
(5) The regulations may prescribe particular situations in which a consumer lease is taken not to be unsuitable for a consumer, despite subsection (2).
Offence
(6) 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: 2 years imprisonment.
147 Prohibition on suggesting to consumers to remain in unsuitable consumer leases
Prohibition on suggesting to remain in unsuitable lease
(1) A licensee must not provide credit assistance to a consumer by suggesting that the consumer remain in a particular consumer lease with a particular lessor if the lease is unsuitable for the consumer under subsection (2).
Civil penalty: 5,000 penalty units.
When the lease is unsuitable
(2) The lease is unsuitable for the consumer if, at that time the licensee provides the credit assistance:
(a) the consumer is, or is likely to be, unable to comply with the consumer’s financial obligations under the lease, or only able to comply with substantial hardship; or
(b) the lease does not meet the consumer’s requirements or objectives; or
(c) if the regulations prescribe circumstances in which a consumer lease is unsuitable—those circumstances apply to the lease.
(3) For the purposes of paragraph (2)(a), it is presumed that, if the consumer could only comply with the consumer’s financial obligations under the lease by selling the consumer’s principal place of residence, the consumer could only comply with those obligations with substantial hardship, unless the contrary is proved.
Information to be used to determine if lease is unsuitable
(4) For the purposes of determining under subsection (2) whether the lease is unsuitable, only information that satisfies both of the following paragraphs is to be taken into account:
(a) the information is about the consumer’s financial situation, requirements or objectives, or any other matter prescribed by the regulations under paragraph 140(1)(d) or (e);
(b) at the time the licensee provides the credit assistance:
(i) the licensee had reason to believe that the information was true; or
(ii) the licensee would have had reason to believe that the information was true if the licensee had made the inquiries or verification under section 140.
Consumer lease not unsuitable under regulations
(5) The regulations may prescribe particular situations in which a consumer lease is taken not to be unsuitable for a consumer, despite subsection (2).
Offence
(6) 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: 2 years imprisonment.
Defence
(7) For the purposes of subsections (1) and (6), it is a defence if:
(a) the licensee suggested that the consumer remain in the consumer lease because the licensee reasonably believed that there was no other consumer lease that was not unsuitable for the consumer; and
(b) the licensee informed the consumer that there is a procedure under sections 177B and 179H of the National Credit Code for consumers in hardship.
Note: For the purposes of subsection (6), a defendant bears an evidential burden in relation to the matter in subsection (7) (see subsection 13.3(3) of the Criminal Code).
(8) The regulations may prescribe particular inquiries that must be made, or do not need to be made, for the purposes of paragraph (7)(a).
Division 7—Special rules for consumer leases for household goods
147A Licensee who makes representations about credit assistance in relation to consumer leases for household goods 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 consumer leases for household goods, 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 a determination under subsection (2), ASIC must take into account the risks associated with consumer leases for household goods 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.
147B Written documentation required in relation to the preliminary assessment for a consumer lease for household goods
(1) If, in a preliminary assessment made for the purposes of paragraph 138(1)(c) or (2)(a), the licensee assesses that a consumer lease for household goods is not unsuitable for a consumer, before providing credit assistance to the consumer by:
(a) suggesting that the consumer apply for a particular consumer lease with a particular lessor; or
(b) assisting the consumer to apply for a particular consumer lease with a particular lessor; or
(c) suggesting that the consumer remain in a particular consumer lease with a particular lessor;
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 138(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.
Part 3‑4—Licensees that are lessors under consumer leases