Schedule 1: Consumer Finance

Introduction

1.1 This Schedule applies to contracts regulated by the NCCP Act.

1.2 This Schedule does not apply to Low Cost Credit Contracts which are covered by Schedule 4.

1.3 The NCCP Act regulates your contract with us if, at the time you enter into the contract:

a. you are a Consumer; and

b. the credit is provided or intended to be provided wholly or predominantly (such as more than 50%) for personal, domestic or household purposes.

1.4 Generally, consumer credit contracts for mortgages, personal loans, credit cards and car loans are regulated by the NCCP Act. The NCCP Act does not apply to some types of consumer credit, including low-cost short-term credit (less than 62 days), insurance premiums paid by instalments, bill facilities, and staff loans.

1.5 If your contract with us is regulated by the NCCP Act:

we must provide you with certain information before you enter a credit contract with us;
you have a right to request certain relevant documents;
we must be members of AFCA, which is a free and independent EDR scheme;
you may have rights to challenge our contract if it is unjust or if the loan is unsuitable for you;
you may seek support from us if you are experiencing financial difficulty or other hardship; and
we must take specific steps where applicable before enforcing our rights under the credit contract – for example, before repossessing property or commencing court action. However, there are some circumstances where there is no requirement for us to give you notice before we commence action to enforce our rights – for example, where we reasonably think urgent action is necessary to protect a vehicle or other goods subject to our contract.

1.6 This Schedule also provides additional information for Consumers about vehicle finance that is regulated under the NCCP Act.

About Consumer credit

1.7 Consumer credit can be:

a single loan repaid over a fixed term with interest and/or fees – for example, a personal loan, with or without a redraw facility. It may be secured or unsecured; or
a continuing line of credit with no fixed term which generally attracts variable interest and/or fees and requires minimum repayments that vary depending on the outstanding balance – for example, a credit card. It is generally unsecured.

Obtaining Consumer credit

1.8 We may allow you to apply for credit in different ways – for example by:

a. applying to us directly (where we make this available);

b. referral to us from another entity in our corporate group; or

c. being “introduced” to us by a Retailer, a finance or mortgage broker, or adviser who is not part of our corporate group. These Intermediaries can also be known as “introducers” or “distributors”.

1.9 An Intermediary is not the person who provides you with credit. An Intermediary may be an independent business that is unrelated to us. If an Intermediary refers you to us, and we accept and approve your application for credit, we will be the credit provider under your contract. We may pay a commission to the Intermediary if you enter into (and settle) a credit contract with us.

1.10 We may authorise Intermediaries (such as motor dealers) to assist you to apply for a credit contract with us so that the credit can be used to purchase goods or services from them. These Intermediaries generally act for us. Other Intermediaries (such as mortgage brokers) may assist to you apply for a credit contract from a number of different credit providers. Those Intermediaries generally act for you.

1.11 An Intermediary may charge you a separate fee for the services they provide to you. We may allow you to finance this fee in your loan so you do not need to pay this upfront. However, you may pay interest on that fee if it is financed in your loan. You can also ask the Intermediary about their fees.

Brokers and advisers

1.12 Generally, Intermediaries who are brokers or advisers must hold an Australian Credit Licence (ACL) to provide you with credit services (such as credit assistance, which is where a broker or adviser helps you to apply for a particular credit contract with a particular credit provider) or be appointed as an Authorised Credit Representative (ACR) by someone who does hold an ACL.

1.13 If we hold an ACL, we are responsible for our ACRs (if we have them) and our other representatives, including the people we or our related entities employ directly. We will train, supervise and monitor their conduct, which may include their interactions with you.

1.14 If a broker or adviser holds an ACL and is proposing to provide you with a credit service, they must first provide you with a “credit quote” or similar document. This will include information about the service they will provide and the maximum fees they will charge you for providing the service. You must accept the credit quote as agreement to pay the fee.

Suppliers

1.15 We may arrange for suppliers (such as Retailers and Motor Dealers) to distribute our products. We may authorise these suppliers and their staff to act on our behalf to assist you to apply for a credit contract with us, where the credit will be used to purchase something from the supplier (such as household goods, a car or vehicle).

1.16 Provided certain conditions are met, those suppliers and their staff will not need to hold an ACL or be an ACR to provide this assistance to you. A licensing exemption may apply such as the 'Point of Sale' (POS) exemption or the ‘passing on documents’ exemption.

1.17 We will take reasonable steps to ensure these suppliers and their staff comply with laws and regulations relevant to the offer of credit, are adequately trained about our product, and provide you with relevant information and documentation in relation to the credit contract with us. If the credit product we provide to you is marketed as “buy now pay later”, we will take reasonable and appropriate steps to ensure that suppliers with whom we have a direct relationship do not distribute our credit products (including a BNPL arrangement) for online gambling, retail gambling, gambling at domestic or offshore casinos, or the purchase of firearms.

Responsible lending

1.18 We have responsible lending obligations under the NCCP Act. We will not enter into a credit contract with you, or increase the limit under your existing credit contract, unless we have met our obligations, which require us to:

a. make reasonable inquiries about your requirements and objectives in relation to the contract;

b. make reasonable inquiries about your financial situation;

c. take reasonable steps to verify your financial situation; and

d. assess whether the loan will not be unsuitable for you.

1.19 Our obligations to make reasonable inquiries about your requirements, objectives and financial situation and take reasonable steps to verify your financial situation are scalable. This means that what we need to do to meet our obligations will vary according to a range of different circumstances as relevant to your application. We will do our best to make these processes as efficient as possible.

1.20 To understand your financial situation, we will ask you to give us certain information, which may include details about:

your income – including your source(s) of income, how much you earn, or the frequency and regularity of your income;
your expenses – such as your living expenses (which may include rent, utilities, groceries, medical, motor vehicle, clothing, education and insurance) and your existing credit commitments such as repayments you make for your mortgage, your credit card(s) or any other loans you have or debts that you owe;
your assets – such as the things that you own, savings, property, shareholdings, motor vehicles and so on; and
your total liabilities – such as what you owe on your mortgage, vehicle finance, personal loans, credit cards or any other debts that you owe.

1.21 We expect that you (and where you engage the services of an Intermediary, they) will provide us with complete and accurate details. You may be asked to sign a statement confirming this information is correct.

1.22 To verify your financial situation, we may conduct certain checks or collate certain information (with your consent) or we may ask you to provide certain information, depending on the circumstances relevant to your application.

1.23 We must assess the credit contract as unsuitable for you if, at the time of the assessment, it is likely that you will be unable to comply with the financial obligations under the contract or could only comply with substantial hardship. To determine whether you will be able to meet your financial commitments without substantial financial hardship, we will use our credit assessment criteria which may also include using financial benchmarks (such as the Household Expenditure Measure) as a comparison tool to assist in our credit assessment.

1.24 We must also assess a credit contract as unsuitable for you if, at the time of the assessment, it is likely that:

a. the contract will not meet your requirements or objectives; or

b. if the National Consumer Credit Protection Regulations 2010 (Cth) prescribe circumstances in which a credit contract is unsuitable – those circumstances will apply.

Credit reports

1.25 We may check your credit records and take your credit history into account in deciding whether to give you a loan. A credit report is a record about your credit activities. It may include information about your credit enquiries, payment defaults, ATO tax defaults, and repayments with credit providers. The information we collect is not limited to the finance industry, but may include your credit activities in relation to utility or telecommunication companies as well. This information is managed by a credit reporting agency and may also include a credit rating, which is based on your credit history.

1.26 Your credit report usually includes:

your details including full name, date of birth, current and previous addresses, current and previous employers;
your repayment history including current loans, due dates for payments, whether you made payments by the due date, dates of missed payments and financial hardship variations;
your credit history including loans you have applied for, defaults over 60 days, where collection activity was undertaken, and any credit infringements imposed; and
other information such as bankruptcies (for up to 7 years after they occurred), Court judgments, debt agreements and personal insolvency agreements (for up to 5 years after they occurred).

1.27 If you use an Intermediary to obtain a loan, you will be asked to accept their or the licensee’s privacy consent document, which will then be made available to us if requested and we may rely on that consent to conduct a credit enquiry.

Information about your loan

Disclosure obligations

1.28 We must give you a credit guide, which is a document that provides you with essential information about us as well as your prospective credit contract. The credit contract will include specific details about your loan (such as the loan amount, the repayment amounts and frequency, interest (where applicable), and fees and charges) that you should carefully consider.

1.29 You should read the credit guide and the credit contract before entering into a credit agreement with us.

Copies of documents, statements and other information

1.30 After we enter into a credit contract with you, we will provide you (and your Guarantor, if applicable) a copy of the signed credit contract, including the terms and conditions and the standard fees.

1.31 If at any time during the term of the credit contract you make a request in writing for a copy of the contract, any credit-related insurance contract in our possession or any notice we have given to you or your guarantor, we will provide these documents to you within 30 days.

1.32 If for some reason we are unable to provide a document within this timeframe, we will advise you of this together with the expected timeframe for providing the document. Documents may be provided in electronic or digital form where this is allowed by law, including in the form of a computer-generated record or in any other form as mutually agreed.

We will ensure co-borrowers are informed about rights and obligations

1.33 You become a co-borrower if you sign a loan alongside another person who also provides their signature as a borrower, and this signifies your acceptance of the credit contract. Co-borrowers can be jointly and severally liable for the entire debt owed under a credit contract. This means if your co-borrower is unable to pay their share of the loan, you will become responsible for repaying the full amount outstanding. This liability continues even if your co-borrower files for bankruptcy or enters a debt agreement or personal insolvency agreement to deal with their unmanageable debt. You should be aware, at the time of signing the credit contract, that there is a possibility you will be held liable for the entire debt.

1.34 Our credit contract will explain your rights and obligations and the risks associated with becoming a co-borrower.

1.35 If you tell us that you are the victim of financial abuse or you are being coerced into becoming a co-borrower, we will do what we reasonably can to help you, including not accepting you as a co-borrower. We may also allow you to end your liability as a co-borrower before the credit is provided.

Guarantors

1.36 If you guarantee another person’s obligations under a credit contract, you are known as the “Guarantor” of that contract.

1.37 As a Guarantor you will generally be responsible for paying back all amounts owing under a contract if the customer cannot (or will not) make the payments. As Guarantor, you may also be liable to pay any fees, charges and interest added to the principal as well as any enforcement expenses.

Signing a guarantee

1.38 You must make your own decision about whether you will become a Guarantor.

1.39 Before you sign a guarantee, we will give you a copy of the proposed credit contract that explains your rights and obligations as a Guarantor, including that:

you can refuse to sign the guarantee (although if you do so we may be unable to provide the borrower with credit);
you may have a right to limit your liability (you can discuss with us how this can be done);
there are financial risks involved;
the guarantee may cover future Loans and variations of the existing Loan with your written consent;
you should consider the information and documents we provide to you, and you can request further information or clarification if required;
you should seek independent legal and financial advice – in some circumstances, we may require that you obtain such advice as a condition of accepting your guarantee.

1.40 If the guarantee relates to a Loan that is regulated under the NCCP Act, we will also include a warning notice that appears immediately above where you sign the guarantee substantially in the form required by Form 8 of the NCCP Regulations.

1.41 We will also give you a copy of the following documents or information in relation to the borrower:

a list of any related security contracts;
any related credit report from a credit reporting body;
any current credit related insurance contract that we have;
any financial accounts or statement of financial position the borrower has given us in the last 2 years for the purposes of the guaranteed loan; and
the latest statement of account for the loan for a period in which a notice of demand was made by us within the last 2 years.

1.42 You should carefully read the guarantee document, the proposed credit contract, and any other documents we give you before you sign the guarantee. We will inform you that you should seek independent legal and financial advice.

1.43 Except where the credit agreement and guarantee are in one and the same document, we will give the guarantee documents to you or your representative, and not to the borrower or someone acting on their behalf, to arrange for you to sign.

During a guarantee period

1.44 You may ask us to further limit the liabilities you have guaranteed under your guarantee. However, we do not have to accept this if:

a. the amount of the limit you request does not cover the borrower’s existing liability (plus any interest owed, any fees or charges that we incur in respect of the liability) under the relevant loan contract;

b. we are obliged to provide further credit to the borrower; or

c. we will not be able to preserve the current value of an asset that is security for the loan without providing further credit.

1.45 If you ask us, we will give you additional copies of information we have already given you about the guarantee, provided you were not given that information in the last 3 months before your request.

Extending your guarantee

1.46 If a borrower obtains a new loan or has changes made to an existing loan, this may be covered by your guarantee if it falls within the limits of your guarantee.

1.47 If we agree to increase the limit in your guarantee, we will give you the information in clause 1.41 again and obtain your written agreement to the extension of the guarantee.

1.48 We will also give you any notice of demand made by us to the borrower about the loan that has not been satisfied.

Withdrawing your guarantee

1.49 You can notify us in writing that you are withdrawing your guarantee:

a. at any time before we provide credit under the loan (although if you do so we may not be able to provide the borrower with credit); or

b. after credit is first provided, if the signed version of the loan is different in a material respect from the proposed loan we gave you before you signed the guarantee. This does not apply to any change described in clause 1.46.

Ending your guarantee

1.50 You can end your liability under the guarantee you have given to us by:

a. paying us the lower of the borrower’s outstanding liability (including any future or contingent liability) or the amount to which your guarantee of the borrower’s liability is limited under guarantee; or

b. making other arrangements that we agree on to release you from the guarantee.

Our rights under the guarantee

1.51 We will not enforce any mortgage or security you have given us in connection with the guarantee, such as a mortgage over your principal place of residence, unless we have first enforced any mortgage or other security that the borrower has given for the guaranteed liability.

1.52 Before we enforce a mortgage over your principal place of residence, we will encourage you to tell us about your circumstances so we can consider other reasonable alternatives for you to repay the guaranteed liability.

1.53 In relation to secured lending, we will not enforce any judgement against you under the guarantee unless:

a. we have first enforced any mortgage or other security that the borrower has provided for the guaranteed liability; and

b. if one or more of the following has occurred:

i. we have obtained a court judgement in our favour against the borrower for payment of the guaranteed liability and the judgement debt remains unpaid for at least 30 days after our written demand for payment;

ii. we have made reasonable attempts to locate the borrower, but without success;

iii. the borrower is insolvent.

1.54 However, the conditions in clause 1.53 do not apply if, after the default notice is issued and after we have informed you of the limitations of our enforcement rights, you specifically agree in writing that they do not apply.

1.55 Furthermore, the conditions in clause 1.53 do not require us to first enforce any mortgage or other security that the borrower has provided if:

a. we reasonably expect that the net proceeds will not be sufficient to repay a substantial portion of the guaranteed liability; or

b. as a result of the borrower not providing us with information, documents or access to premises or assets – we are unable to reasonably assess whether the net proceeds will not be sufficient to repay a substantial portion of the guaranteed liability.

Guarantors experiencing financial difficulty

1.56 If you are a Guarantor and we have made a demand for you to pay under a guarantee and you are experiencing financial difficulty, you should contact us as soon as possible to discuss your options.

Defaults, debt recovery and repossession of secured assets

1.57 If your contract is regulated under the NCCP Act and you have requested hardship assistance, we will generally suspend any recovery action against you until a decision has been made about your hardship request and that decision has been communicated to you via your last known address or contact details. There are some circumstances where we do not need to suspend our recovery action (for example - if you have requested financial hardship assistance in the previous four months and on a materially similar basis, or we reasonably think that urgent action is necessary to protect the asset or other goods subject to the credit contract).

1.58 If you have made a complaint to AFCA, we will adhere to AFCA's requirements for dealing with the complaint, including any requirements about recovery action.

1.59 We will not proceed with any recovery action if we have agreed to a financial hardship arrangement with you and you are meeting your obligations under that arrangement. We will not on-sell or assign your debt to a debt collector during a temporary financial hardship arrangement.

1.60 In certain circumstances (such as where we have agreed a variation to your credit contract as part of a longer-term hardship arrangement), we may reach an agreement with you for you to voluntarily surrender the asset you purchased with the proceeds of our loan so we can sell it and apply the proceeds towards repaying the amounts you owe to us. We may also require you to enter into a new arrangement with us to pay any shortfall following the sale of the asset within a specific period.

1.61 We may ask a third party to manage these arrangements for us. That party will be authorised to take further actions and implement additional financial hardship processes, if needed.

Defaults

1.62 If you default on your repayments, we may be entitled to repossess the asset or other goods used as security.

1.63 If this is the case, you have protections under the NCCP Act that we must follow:

We must issue you with a credit default notice, unless one of the exceptions in section 88(5) of the National Credit Code applies. If you fail to comply with the notice within the prescribed timeframes, we may be entitled to repossess the asset or assets.
We must give you a written notice within 14 calendar days of repossessing the assets, which sets out the estimated value of the assets, the enforcement expenses incurred to date, and a statement of your Consumer rights, unless an exception under the law applies.
You have 21 calendar days to respond to the notice unless we have a legal entitlement to waive this timeframe.
If the arrears and enforcement expenses specified in the notice are paid within 21 days we must return any goods to you.
If you do not take any of the steps set out in the notice, we can sell the assets.
We must sell the assets for the best price reasonably obtainable. It is in our interests and yours that we obtain the highest possible sale price. After we sell the assets, we must give you a notice setting out the amount realised from the sale. There may be a shortfall between the sale price of the assets and amount owing on the loan, in which case we must tell you the amount left to pay by you (if any).

1.64 This process does not usually apply to repossession for default on home loan repayments. In these cases, court action will normally be commenced to repossess the mortgaged property.

Vehicle Finance for Consumers

1.65 This section provides further information about vehicle finance for Consumers.

1.66 As a lender, we may specialise in providing vehicle finance or we may provide it as part of our broader Consumer lending business.

1.67 Vehicle finance refers to lending for vehicles, including but not limited to, new and used cars, campervans, caravans, vans, motorcycles, motorised marine craft and all-terrain vehicles, where the vehicle is used as security for the loan.

1.68 If you are an individual who applies for a loan in your own name to purchase a vehicle, but the vehicle is predominantly for a business purpose, the NCCP Act will not apply to the loan and you may be asked to sign a “business purpose declaration”. In this case, the clauses about commercial vehicle finance in Schedule 3 apply to you.

About vehicle finance

1.69 Vehicle finance helps you to spread the cost of purchasing a vehicle over the duration of the loan, known as the “term” of the loan. Interest rates for vehicle finance are set by us for the term of the loan and confirmed in the loan agreement.

Financing insurance and other products through vehicle finance

1.70 When you take out vehicle finance with us, the security (that is, the vehicle) must be comprehensively insured, but you have your choice of insurer.

1.71 Some lenders allow you to finance the cost of insurance and other products (such as warranties offered by a Motor Dealer) as part of the loan. You can ask us, or the Motor Dealer who is introducing you to us, if we allow these costs to be financed.

Add-on insurance products

1.72 A Motor Dealer may provide you with additional information about add-on insurance products.

1.73 Add-on insurance products include, but are not limited to, insurance coverage for tyre and rim damage, key replacement, and engine protection. You will need to consider if add-on insurance is something you need.

1.74 The law imposes a mandatory four day pause period between the sale of a vehicle to you or the entry into a credit contract with us, and the sale of any add-on insurance. This period of time will give you further opportunity to consider whether you need the add-on insurance product.

Breaking a vehicle finance contract

1.75 If you want to end the credit contract before the end of the loan term, you will be required to pay out the loan in full. We may also charge an early repayment fee or break costs for ending the contract early. If you ask, we will provide you with an estimate of the costs you will need to pay for breaking the loan early.

Prompt and fair resolution of complaints

Complaints about the vehicle

1.76 If the seller of the vehicle is a licensed dealer, they will provide you with information about how to make a complaint about the vehicle and/or their sales practices.

1.77 If you bought the vehicle privately, your rights under consumer laws are different. You are not entitled to any cooling-off period or a statutory warranty and may have limited recourse against the seller.

1.78 You can get further information and guidance on your rights and how to make a complaint about a vehicle from the ACCC and the consumer affairs department or fair trading office in your State or Territory.

Complaints about insurance

1.79 If you have a complaint about the insurance that you have taken out in relation to the vehicle, you should contact the insurance provider. You should be able to find information in the insurer’s product disclosure statement (PDS), your policy document, or on the insurer’s website about how to make a complaint.