This Act is the Consumer Credit Administration Act 1995.
2-
Commencement
This Act commences on a day or days to be appointed by proclamation.
3-
Definitions
(1)
In this Act:
client of a finance broker is the person on behalf of whom consumer credit is to be obtained or is obtained (whether or not for commission) by the finance broker.
commission includes any fee, charge, reward or other remuneration (whether or not monetary and whether characterised as a termination fee or otherwise) that is:
(a)
paid or payable by the client of a finance broker for or in respect of finance broking engaged in by the finance broker on behalf of the client, and
(b)
retained by the finance broker.
consumer credit means credit to which any consumer credit legislation applies, and includes arrangements under a consumer lease as defined in the Consumer Credit (New South Wales) Code.
consumer credit legislation means the following Acts and the regulations made under them:
(a)
this Act,
(b)
the Consumer Credit (New South Wales) Act 1995 (including the Consumer Credit (New South Wales) Code),
(c)
the Credit Act 1984,
(d)
(Repealed)
(e)
the Credit (Home Finance Contracts) Act 1984.
credit application fee or credit establishment fee means a fee charged by a credit provider, or a person or body authorised to act on behalf of a credit provider, for determining an application for consumer credit or the initial administrative costs of providing consumer credit, or both.
credit provider means a credit provider under any consumer credit legislation and include a prospective credit provider.
debtor means a debtor under any consumer credit legislation and includes a prospective debtor.
director of a corporation has the same meaning as it has in the Corporations Act 2001 of the Commonwealth.
Director-General means the Director-General of the Department of Fair Trading holding office as such under Part 2 of the Public Sector Management Act 1988.
disciplinary action means any of the following actions the Director-General is empowered to take:
(a)
requesting that a credit provider or finance broker execute a deed giving undertakings (under section 14),
(b)
issuing a notice to show cause (under section 15),
(c)
reprimanding a credit provider or finance broker (under section 18 (2) (a)),
(d)
ordering a credit provider or finance broker to rectify the consequences of unjust conduct within a specified period (under section 18 (2) (b)),
(e)
ordering a credit provider or finance broker to comply with a requirement within a specified period (under section 18 (2) (c)),
(f)
making a prohibition order (under section 19 or 20).
engages in finance broking—see subsection (3).
exercise a function includes perform a duty.
finance broker means a person who engages in finance broking.
finance broking contract means a contract between a finance broker and a client under which the finance broker agrees to engage in finance broking on behalf of the client.
function includes a power, authority or duty.
officer of a corporation has the same meaning as it has in the Corporations Act 2001 of the Commonwealth.
official means:
(a)
a public servant, or
(b)
a person of a class prescribed by the regulations.
premises means any place, vehicle or vessel.
prohibition order means a prohibition order made under Division 3 of Part 3 and in force.
secured—see subsection (4).
Tribunal means the Consumer, Trader and Tenancy Tribunal established by the Consumer, Trader and Tenancy Tribunal Act 2001.
unjust conduct means conduct:
(a)
that is unfair, dishonest or fraudulent, or
(b)
that consists of anything done or omitted to be done in breach of contract, whether or not proceedings in respect of the breach have been brought, or
(c)
that consists of a contravention of any consumer credit legislation.
valuation fee means a fee for a valuation obtained in respect of any security to be offered for a contract for consumer credit.
(2)
For the purposes of this Act, a person provides consumer credit if the person:
(a)
provides the credit in the course of a business of providing consumer credit or as part of or incidentally to any other business of the person, or
(b)
is involved in the taking of a mortgage, or the taking of a guarantee, to which any consumer credit legislation applies.
(3)
For the purposes of this Act, a person engages in finance broking if the person (“the intermediary”) acts, or purports to act, as an intermediary to negotiate and obtain consumer credit for a person (other than the intermediary’s employer, or a principal who is not a client of the intermediary) in return for a commission or financial benefit, whether payable to the intermediary by the person, the credit provider or any other person or body.
(4)
For the purposes of this Act, consumer credit is secured for a client when the credit provider has made a final determination regarding the credit application and is prepared to provide the client with the consumer credit sought.
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Conduct of agents
For the purposes of this Act, the conduct of an officer, employee or agent of a credit provider or finance broker acting within his or her actual or ostensible authority will be imputed to the credit provider or finance broker and taken to be the conduct of the credit provider or finance broker.
The object of this Part is to provide for the regulation of persons who engage in finance broking so as to ensure that the clients of finance brokers:
(a)
are given adequate information before entering into finance broking contracts, and
(b)
are protected from unfair practices engaged in by finance brokers, and
(c)
have access to a redress mechanism when finance brokers breach the terms of the finance broking contract, engage in unjust conduct or charge excessive commission.
4B
Application of Part
(1)
This Part applies to and in respect of a finance broker only in so far as consumer credit to which the business of the finance broker relates is, or includes, credit to be provided under a credit contract within the meaning of the Consumer Credit (New South Wales) Code.
(2)
This Part does not apply to or in respect of a finance broker of a class prescribed by the regulations.
Division 2
Finance broking contracts
4C
Finance broking contract must be in writing and must be given to client
(1)
A finance broker must not engage in finance broking on behalf of a particular client unless:
(a)
the finance broker has first entered into a written finance broking contract with the client, and
(b)
that contract has been signed by the client, and
(c)
the contract contains the matters required by subsection (3), and
(d)
a copy of the contract has been given to the client.
Maximum penalty: 50 penalty units.
(2)
Subsection (1) applies to finance broking on behalf of a client whether or not the client is under any obligation to pay commission under the finance broking contract.
(3)
The matters required by this subsection are:
(a)
particulars of the amount of consumer credit to be obtained or, if the amount is not ascertainable, the maximum amount of consumer credit, or the credit limit, to be obtained, and
(b)
if the consumer credit is to be for a fixed term—the term of the consumer credit desired by the client, and
(c)
if the consumer credit is intended to be repaid at regular intervals—the maximum periodic repayments the client is prepared to make in respect of the consumer credit (including the repayment of any credit application fee, credit establishment fee or other fee), and
(d)
if the consumer credit is not intended to be repaid at regular intervals—the repayment arrangements acceptable to the client (including for the repayment of any credit application fee, credit establishment fee or other fee), and
(e)
the maximum interest rate that will be payable in respect of the consumer credit, and
(f)
the date by which the finance broker is to have secured the consumer credit for the client, and
(g)
a statement, in the form prescribed by the regulations, that the finance broker’s recommendations will be drawn from a range of potential lenders that does not necessarily include all lenders who offer consumer credit of the nature of the consumer credit sought, and
(h)
the name and address of the finance broker, and
(i)
if the finance broker is a company—the Australian Company Number (ACN) of the company, and
(j)
if the finance broker trades under a business name—the name and address of the principals of the relevant business, and
(k)
the amount of commission (if any is payable) payable by that client or, if the exact amount of commission is not known, the method of calculating the commission and an estimate of the amount that will be payable if consumer credit is provided on the terms set out in the finance broking contract, and
(l)
when and how any such commission will be payable, and
(m)
if a financial or other benefit will be received from a person other than the client by the finance broker if consumer credit is ultimately provided to the client—a statement, in the terms prescribed by the regulations, as to the fact that the finance broker will receive a financial or other benefit and as to any other matters that may be prescribed, and
(n)
any other matter that may be prescribed by the regulations.
(4)
A finance broker must not demand, receive or accept any commission in respect of finance broking engaged in on behalf of a client if the finance broker has failed to comply with this section in relation to that finance broking.
Maximum penalty: 50 penalty units.
Division 3
Commission
4D
Up-front commission prohibited
A finance broker must not demand, receive or accept any commission from a client before securing the consumer credit in respect of which the commission is payable.
Maximum penalty: 50 penalty units.
4E
Payment of commission depends on terms of consumer credit being the same as those agreed to
(1)
A finance broker must not demand, receive or accept any commission from a client in respect of finance broking engaged in on behalf of a client if:
(a)
the amount of consumer credit secured is not the same as the amount specified in the written finance broking contract, or
(b)
in the case of consumer credit intended to be for a fixed term—the consumer credit secured is for a term that is not the same as the term specified in the contract, or
(c)
in the case of consumer credit intended to be repaid at regular intervals—the periodic repayments exceed the maximum periodic repayments specified in the contract, or
(d)
in the case of consumer credit not intended to be repaid at regular intervals—the repayment arrangements are more onerous than the repayment arrangements specified in the contract, or
(e)
the consumer credit is secured at a rate of interest that exceeds the maximum rate specified in the contract, or
(f)
the consumer credit is not secured by the date that is set out in the contract.
Maximum penalty: 50 penalty units
(2)
In this section, a reference to a finance broking contract includes a reference to a contract that has been varied in writing and signed by both the finance broker and the client.
(3)
A finance broker is not prevented by this section from demanding, receiving or accepting any commission in respect of finance broking merely because of the potential for an increase in the periodic repayments or interest rate, or for repayment arrangements that are more onerous, that arises because of a variation of the interest rate in accordance with the consumer credit contract.
4F
Commission must not be greater than that disclosed or estimated in contract
A finance broker must not demand, receive or accept from a client in respect of consumer credit obtained pursuant to a finance broking contract with the client:
(a)
if an amount of commission is specified in the finance broking contract—any commission that is greater than the amount so specified, or
(b)
if the exact amount of commission is not specified in the finance broking contract:
(i)
any commission that is greater than the amount calculated by the method specified in the contract, or
(ii)
if the amount calculated by the method specified in the contract would result in an amount of commission greater than the amount estimated in the contract, any commission that is greater than the amount estimated in the contract.
Maximum penalty: 50 penalty units.
4G
Finance broker may charge for costs even if client declines credit
(1)
A finance broker must not demand, receive or accept a commission in respect of finance broking engaged in on behalf of a client who has decided not to enter into a credit contract for the consumer credit that the finance broker has secured unless:
(a)
the consumer credit secured by the finance broker:
(i)
is of the same amount as that specified in the written finance broking contract with the client, and
(ii)
is for a term that is the same as any term specified in that contract, and
(iii)
if the consumer credit is intended to be repaid at regular intervals—involves periodic repayments that do not exceed the maximum periodic repayments specified in the contract, and
(iv)
if the consumer credit is not intended to be repaid at regular intervals—involves repayment arrangements that are not more onerous than the repayment arrangements specified in the contract, and
(v)
is secured at a rate of interest that does not exceed the maximum rate specified in the contract, and
(vi)
was secured by the date that is specified in the contract, and
(b)
the finance broking contract was not validly terminated before the finance broker secured the credit, and
(c)
the finance broker and the client agreed in the finance broking contract that commission may be demanded, received or accepted if the client decided not to enter into a credit contract for the consumer credit that the finance broker has secured in the circumstances referred to in paragraphs (a) and (b).
Maximum penalty: 50 penalty units.
(2)
A finance broker is not prevented by this section from demanding, receiving or accepting any commission in respect of finance broking merely because of the potential for an increase in the periodic repayments or interest rate, or for repayment arrangements that are more onerous, that may have arisen because of a variation of the interest rate in accordance with the consumer credit contract.
