Review | 8 June 2017



Key issues: Mortgage | Lender | Non-regulated loan should be assessed as regulated under the National Consumer Credit Protection Act 2009 (Cth) (the Credit Act) | Responsible lending | Inappropriate and unconscionable loan | Unconscionable conduct | Breach of statutory obligations







Summary of the complaint:







  • The consumers fell into default under its mortgage and the FSP repossessed the consumer’s investment property and commenced proceedings for debt and possession of another property.

  • The consumers claimed that their loan was regulated by the National Consumer Credit Protection Act 2009 (Cth) (the Credit Act) and, therefore, the FSP was subject to the responsible lending obligations in that Act.

  • The consumers claimed that their loan otherwise inappropriate or unconscionable?

  • The consumers claimed that the FSP engaged in unconscionable conduct in accepting the guarantee and mortgages from the consumer guarantors.

  • The consumers claimed that the FSP failed to comply with its statutory obligations before entering into possession of the consumers’ property.

  • We found that the loan was not regulated by the Credit Act and therefore the FSP was not required to comply with the statutory responsible lending obligations in that Act.

  • We found that the FSP did not provide an inappropriate or unconscionable loan to the consumers’ company.

  • We found that the FSP did not engaged in unconscionable conduct in accepting the guarantee and mortgages from the consumers to secure the loan to their company.

  • We found that the  FSP complied with its obligations before entering into possession of property owned by one of the consumers.

  • The Determination affirmed the position set out in our Review.

Download Review 8 June 2017.

This Review was referred to the Ombudsman for a Determination.