(1) A supplier must not require a purchaser of goods or services to apply for, or obtain, credit from a particular credit provider.
Criminal penalty: 100 penalty units.
(2) Subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
141 Prohibition on payment for goods or services by postdated bills of exchange or notes which exceed cash price of goods or services
(1) A supplier must not demand or accept payment from the purchaser for goods or services supplied under a sale contract in the form of a postdated bill of exchange or promissory note given by the purchaser if the face value of the bill or note exceeds the cash price of the goods or services.
Criminal penalty: 100 penalty units.
(2) Subsection (1) does not apply unless the postponement of the debt to the supplier constitutes a provision of credit to which this Code applies.
(3) Subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Part 8—Related insurance contracts
142 Interpretation and application
(1) For the purposes of this Code, a credit‑related insurance contract is a contract for insurance of any of the following kinds in connection with a credit contract:
(a) insurance over mortgaged property;
(b) consumer credit insurance;
(c) insurance of a nature prescribed for the purposes of this section by the regulations.
(2) This Code does not apply to insurance over mortgaged property that:
(a) is insurance for an extended period of warranty for goods; or
(b) is insurance over property that is not mortgaged to secure obligations under the credit contract.
(3) This Code does not apply to consumer credit insurance in connection with a credit contract unless the contract for consumer credit insurance insures the obligations of the debtor under the credit contract.
143 Requirement to take out insurance or to insure with particular insurer or on particular terms
(1) A credit provider or a supplier must not:
(a) require a debtor or guarantor to take out insurance or to pay the cost of insurance taken out or arranged by the credit provider or supplier; or
(b) represent to a debtor or guarantor that the debtor or guarantor is required to pay the cost of any such insurance;
unless the insurance is compulsory insurance, mortgage indemnity insurance, insurance over mortgaged property or insurance of a nature and extent approved for the purposes of this section by the regulations.
Criminal penalty: 100 penalty units.
(2) A credit provider or a supplier must not, in connection with a credit contract or a sale contract in relation to which there is a tied loan contract or a tied continuing credit contract:
(a) require a debtor or guarantor to take out insurance with a particular insurer (unless the insurer is the only insurer providing insurance of the relevant kind or the requirement is exempted from the operation of this section by the regulations); or
(b) make any unreasonable requirement as to the terms on which the debtor or guarantor is to take out insurance.
Criminal penalty: 100 penalty units.
(3) Subsections (1) and (2) are offences of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Civil effect
(4) If the credit provider or supplier contravenes this section, the insured is entitled to recover the whole of the premium paid under the contract from the credit provider or supplier, as the case requires.
144 Financing of insurance premiums over mortgaged property
(1) A credit provider must not knowingly provide credit to the debtor to pay the premium or finance the premium on insurance taken out by the debtor over mortgaged property for a period of insurance exceeding 1 year, but may provide credit for or finance successive premiums for periods of 1 year or less.
Criminal penalty: 100 penalty units.
(2) The credit provider must not knowingly debit the premium to the debtor’s account more than 30 days before the beginning of the period of insurance to which it relates.
Criminal penalty: 100 penalty units.
Civil effect
(3) If a credit provider contravenes subsection (1), the insured is entitled to recover the whole of the premium paid under the contract from the credit provider. If a credit provider contravenes subsection (2), the insured is entitled to recover the amount of premium debited in contravention of the subsection.
145 Commission for consumer credit insurance
(1) This section applies to commission paid by an insurer in connection with consumer credit insurance taken out by the debtor, or for which an amount is paid by the debtor.
(2) The total of any such commission accepted by all or any of the following:
(a) the credit provider;
(b) the supplier under a sale contract in relation to which there is a tied loan contract or a tied continuing credit contract;
(c) the agent of the credit provider or supplier;
must not exceed, in amount or value, 20% of the premium (excluding government charges).
(3) A credit provider or any such supplier or agent must not accept, and an insurer must not pay, a commission exceeding, in amount or value, the maximum allowed under this section.
Criminal penalty: 100 penalty units.
(4) Subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Civil effect
(5) If a credit provider or supplier contravenes this section, the insured is entitled to recover the whole amount or value of the commission from the credit provider or the supplier, as the case requires.
ASIC determinations of caps on commissions
(6) Despite subsection (1), this section does not apply to commission mentioned in that subsection if the insurance:
(a) is an add‑on risk product of a kind covered by a determination under subsection 12DMC(3) of the Australian Securities and Investments Commission Act 2001; and
(b) is provided in connection with:
(i) the sale or long‑term lease of a motor vehicle; or
(ii) the provision of credit connected with the sale or long‑term lease of a motor vehicle.
Note: Under subsection 12DMC(3) of the Australian Securities and Investments Commission Act 2001, ASIC may determine caps for commissions provided in connection with consumer credit insurance for credit connected with the sale or long‑term lease of a motor vehicle.
146 Supply of copy of credit‑related insurance contract by insurer
(1) If the premium under a credit‑related insurance contract is financed under the credit contract, the insurer must ensure that a copy of the policy of insurance is given to the debtor within 14 days after acceptance of the insurance proposal by the insurer.
Criminal penalty: 100 penalty units.
(2) In the case of any such contract of insurance entered into by the credit provider in which the debtor has a beneficial interest, the credit provider must ensure that a written notice containing particulars of the insurance prescribed by the regulations is given to the debtor within 14 days after the beneficial interest is acquired by the debtor.
Criminal penalty: 100 penalty units.
(3) Subsections (1) and (2) do not apply to compulsory insurance.
(4) Subsections (1) and (2) are offences of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
147 Rejection of debtor’s proposal for insurance
(1) If a credit provider proposes to finance the amount payable by the debtor under or in connection with a credit‑related insurance contract and the proposal for insurance is rejected by an insurer, the insurer must inform the debtor and the credit provider of its rejection.
(2) Unless the insurance is to be arranged with another insurer, the credit provider must ensure that any amount paid by the debtor is refunded or credited in full.
Criminal penalty: 100 penalty units.
(3) Subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) The credit provider may, in turn, recover the amount paid to the debtor from the insurer, if an amount has been paid to the insurer by the debtor under or in connection with the proposed insurance contract.
148 Termination of consumer credit insurance contract if credit contract terminated
(1) On termination of a credit contract, any relevant credit‑related insurance contract financed under the credit contract for consumer credit insurance in force is also terminated.
(2) If a credit contract is terminated, the credit provider is required to pay the debtor or credit the debtor with a proportionate rebate of premium paid under any relevant credit‑related insurance contract for consumer credit insurance in force immediately before the credit contract is terminated.
(3) The credit provider may, in turn, recover the amount paid to the debtor from the insurer.
(4) The regulations may prescribe the manner of calculating the proportionate rebate of premium for the purposes of this section, including the rebate payable where this section does not apply to the whole of a credit‑related insurance contract.
(5) This section has effect despite any provision of the credit‑related insurance contract.
(6) This section does not apply to a credit‑related insurance contract, to the extent that it provides a benefit in the event of the death of the debtor, if a credit contract is terminated on the death of a debtor. However, it does apply to the credit‑related insurance contract to the extent that it provides other benefits.
149 Termination of insurance contract over mortgaged property if credit contract terminated
(1) If a credit contract is terminated before the end of the term of a credit‑related insurance contract over mortgaged property financed under the credit contract or before any such insurance contract is otherwise terminated, the debtor is entitled to terminate the insurance contract and recover from the insurer a proportionate rebate of premium paid under the insurance contract.
(2) On the termination of the credit contract, the credit provider must inform the debtor in accordance with the regulations of the debtor’s rights under this section.
Criminal penalty: 50 penalty units.
(3) Subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) The regulations may prescribe the manner of calculating the proportionate rebate of premium for the purposes of this section.
(5) An entitlement under this section to terminate an insurance contract may be exercised only by notice in writing to the insurer.
(6) This section has effect despite any provision of the credit‑related insurance contract.
Part 9—Advertising and related conduct
150 Advertising
General principle
(1) A person must not publish, or cause to be published, an advertisement that states or implies that credit is available unless the advertisement complies with:
(a) this section; and
(b) if, under Part 10, the comparison rate is included or required to be included—Division 2 of that Part.
Criminal penalty: 100 penalty units.
Regulations
(2) The advertisement must not contain a statement of a kind prohibited by the regulations. It must contain any statement required by the regulations.
Annual percentage rate
(3) The advertisement need not contain an annual percentage rate, but must do so if the advertisement states the amount of any repayment. If the advertisement contains an annual percentage rate and credit fees and charges are payable, the advertisement must:
(a) state that fees and charges are payable; or
(b) specify the amount of the fees and charges payable; or
(c) specify the amount of some of the fees and charges payable and state that other fees and charges are payable.
(3A) Subsection (3) does not apply if the credit would, if provided as advertised, be provided under a small amount credit contract.
Civil effect
(4) A person who suffers loss as a result of a contravention by another person of this section may recover the amount of the loss against that other person or any other person involved in the contravention.
151 Persons liable for advertisements
(1) A person is, in the absence of proof to the contrary, taken to have caused an advertisement to be published if:
(a) the person provides credit, owns or has an interest in any goods, or supplies or has an interest in the supply of any goods or services, which the advertisement promotes; and
(b) the advertisement specifies the name, business name, address, telephone number, facsimile number or post office box number of the person or the person’s agent.
(2) It is a defence to a charge under section 150 of causing an advertisement that does not comply with that section to be published if the person charged proves that he or she could not, by the exercise of reasonable care, have prevented the noncompliance to which the offence relates.
152 Defence
A printer, publisher or proprietor of a newspaper, a licensee of a commercial broadcasting or television station, an exhibitor of a film, or a person acting with the authority of any of them, does not commit an offence under section 150 unless he or she suspected, or had reason to suspect, that publishing the advertisement would constitute an offence.
153 Interest rates which may be disclosed
(1) A person must not disclose an interest rate:
(a) in an advertisement that states or implies that credit is available; or
(b) to a debtor before the debtor enters into a credit contract;
unless the interest rate is expressed as a nominal percentage rate per annum or is the comparison rate calculated as prescribed by the regulations and accompanied by the warnings set out in the regulations.
Criminal penalty: 100 penalty units.
(2) Subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
154 False or misleading representations
Prohibition on making false or misleading representations
(1) A person must not make a false or misleading representation in relation to a matter that is material to entry into a credit contract or a related transaction or in attempting to induce another person to enter into a credit contract or related transaction.
Civil penalty: 5,000 penalty units.
Offence
(1A) 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.
(2) For the purposes of subsections (1) and (1A), it is a defence if a person charged proves that he or she reasonably believed that the representation was not false or misleading.
Right to recover loss
(3) A person who suffers loss as a result of a contravention by another person of this section may recover the amount of the loss from that other person or any other person involved in the contravention.
155 Harassment
Prohibition on harassment
(1) A credit provider or supplier must not harass a person in attempting to get that person to apply for credit or to enter into a credit contract or a related transaction.
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: 100 penalty units.
156 Canvassing of credit at home
Prohibition on canvassing credit at home
(1) A credit provider must not visit (personally or in the person of an employee or agent) a place of residence for the purpose of inducing a person who resides there to apply for or obtain credit, except by prior arrangement by the credit provider with a person who resides there.
Civil penalty: 5,000 penalty units.
Offence
(1A) 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: 100 penalty units.
(2) A person who visits another’s residence for the purpose of offering goods or services for sale and who offers to provide or arrange for the provision of credit to finance the sale will not be taken to have called for the purpose of inducing a person to apply for or obtain credit.
Part 10—Comparison rates
Division 1—Preliminary
157 Object of Part
(1) The object of this Part is to assist consumers to identify the true cost of credit offered by credit providers.
(2) In order to achieve that object, this Part makes it mandatory for credit providers to include the comparison rate in advertisements for consumer credit (other than under continuing credit contracts or low cost credit contracts) if an interest rate is advertised.
(3) The comparison rate will reflect the total cost of credit arising from interest charges and other prescribed credit fees and charges.
158 Part not to apply to continuing credit contracts or low cost credit contracts
(1) This Part does not apply to advertising or other matters about the provision of credit under continuing credit contracts or low cost credit contracts.
(2) Accordingly, a reference in this Part to the provision of credit (or to a credit contract or related matters) does not include a reference to:
(a) the provision of credit under a continuing credit contract (or to a continuing credit contract or matters related to such a contract); or
(b) the provision of credit under a low cost credit contract (or to a low cost credit contract or matters related to such a contract).
159 Definitions
In this Part:
consumer credit product means any form of facility for the provision of credit (other than under a continuing credit contract or a low cost credit contract) provided to debtors by a credit provider.