Determination - 13 January 2014

Key issues: Application of the National Credit Code to short term credit contracts | Responsible lending obligations of credit assistance providers and credit providers | Disclosure requirements of the National Credit Code | Breach of 48% APR cap | Misleading conduct

Summary of Determination

I find that:

  • the four loans that the FSPs arranged and provided to the consumer are credit contracts to which the National Credit Code (NCC) applies;
  • in arranging and providing these loans to the consumer, the FSPs:
  1. contravened their responsible lending conduct obligations imposed by the National Consumer Credit Protection Act 2009 (Cth) (NCCPA); and
  2. breached the prohibitions on assisting a consumer to apply for, and enter into, unsuitable credit contracts;
  • the four credit contracts contravene several disclosure requirements imposed by the NCC, a number of which are “key requirements” within the meaning of the NCC;
  • the annual percentage rate of interest (APR) charged under the four credit contracts exceeds the maximum 48% APR permissible in New South Wales; and
  • CAP engaged in misleading conduct in contravention of s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act).

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