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Buying on credit

Contributed by DominicGomez and current to 1 May 2016

In this section we use a number of different terms to mean the same, or at least, very similar thing. The main terms to be familiar with are:
  • creditor (the person or organisation that lends the money) - credit provider - lender - mortgagee
  • debtor (the person or organisation that borrows the money) - borrower - mortgagor.

Before making any purchase on credit, a person should consider whether they really need to use credit at all. Paying cash is almost certainly the cheapest way to buy goods or services, especially for small purchases. Credit is not free money; those who buy on credit usually pay for the privilege of doing so by paying interest on the money borrowed to purchase the goods or service. Another term used to describe a credit agreement is a 'loan'.

In the NT credit is available from a number of institutions, including finance companies, credit unions, building societies and banks. The general provisions in this section apply to credit contracts with all these institutions.

Before buying on credit, consumers should shop around to compare the costs of credit on (including interest and charges) offer. Charges imposed by banks, finance companies, credit unions and retailers vary, as do charges for different types of transactions, such as credit cards, bank overdrafts, loans secured by mortgage or unsecured personal loans. A salesperson will often help a consumer obtain a loan, but a consumer should be particularly wary of the terms of such credit agreements because the helpfulness is often motivated by the extra commission the salesperson receives if they successfully sell credit along with the goods.

Since 1 November 1996, Australia has had uniform national consumer credit laws (the Consumer Credit Code under the Consumer Affairs and Fair Trading Act 1990 (Cth). In 2009, the National Consumer Credit Protection Act 2009 (Cth) (NCPA) was enacted and it came into effect in mid 2010. NCPA introduced a new consumer credit scheme, the National Credit Code (NCC). The NCPA and NCC regulate what creditors can do when it comes to lending individual consumers money.

The real cost of credit

Finding out the real cost of credit is a two-step process.

First, it involves finding out about interest charges and any other fees or charges that are likely to apply to the loan, such as transaction fees and set up or establishment fees. Together, these charges make up the real 'cost' or 'price' of the credit and can be used to compare it with what is available elsewhere. Under the NCC it is compulsory for financial institutions to advise borrowers of the costs they will incur over the lifetime of a loan.

All fees should be discussed with the lending institution when finance is first sought. A customer would be justifiably suspicious if, for example, interest charged on a loan is more than about 5% higher than the currently advertised home loan rate. Prices should be sought from a range of credit providers. Cost comparisons are complicated by the fact that different kinds of loans carry different charges. For example, housing loans almost always carry establishment charges and fees, whereas personal loans usually do not.

It is also important to note whether the interest rate charged is fixed or variable. That is, does the interest rate remain the same throughout the entire duration of the loan, or does it vary, and, if so, when and on what basis. Where making an accurate comparison is difficult, independent financial advice should be sought. Choice has detailed information on the types of loans that are available. Most of this information is publically available on its website (see Contact points ).

Second, a customer should find out the amount they are expected to repay each week, fortnight or month, ensuring that this figure is the same as that written into the contract. For example, a customer might have been quoted one amount for a loan and then find when signing that some kind of loan insurance or another charge has been added to the contract, and the periodic repayment amount has increased.

Where a loan has no fixed repayments, as is increasingly common, a customer should decide how long they want the loan to run and ask the credit provider to calculate the repayments necessary to achieve their preferred repayment period. Many banks also offer as part of their online banking services access to loan calculators, which customers can use to determine repayments on a certain loan amount over a specified period. Also check the Australian Securities and Investments Commission's MoneySmart website ( which has a range of calculators to assist consumers.

Before shopping around for credit, customers should work out how much they can afford to pay each week by doing a budget of all regular expenses and income, as well as allowing for irregular payments like bills, gifts, holidays and special occasions, such as Christmas. MoneySmart 's budget planner can assist to collect this information. The customer, not the lender or salesperson, is in the best position to assess their capacity to make repayments. A customer should never allow a salesperson or a creditor's employee to persuade them to borrow more money than they can afford to repay. In addition, if the loan has a variable interest rate, the borrower should also take into account the possibility of future increases in interest rates, which would increase their repayments.

Credit at the point of sale

Credit can often be arranged where major consumer goods are sold. For example, most car dealers will arrange finance for prospective car buyers. This is referred to as point of sale credit. In these situations it is important to realise that car dealers and other retailers who offer point of sale credit are usually paid substantial commissions by finance companies to sell their goods on credit. Often both the purchaser and salesperson are motivated when it comes to getting credit: a purchaser may only be able to buy goods if they obtain credit; a salesperson may only get their commission if the credit is approved. The salesperson may therefore be inclined to tempt the purchaser to 'improve' the information they provide on an application for credit by, for example, rounding-up the income or claiming irregular income as regular income. Be wary of this and only put accurate and realistic information in credit application forms.

Point of sale credit is often more expensive than credit arranged direct from a financier by the customer themselves. It is, therefore, essential to compare the cost of credit offered by a retailer at point of sale with that directly available from a bank, building society, credit union or finance company. It is best to try to compare like with like. For example, when comparing repayment amounts, an intending borrower should check if the repayments continue for the same period of time. A loan for a particular amount that has repayments of $300 per month over three years is cheaper than a loan for the same amount that has repayments of $250 per month over four years.

Consumer credit insurance

Consumer credit insurance, sometimes called loan protection insurance, is designed to cover the borrower's repayments if they are unable to work due to illness, accident or death. Financial institutions and their point of sale agents, such as car dealers, often encourage borrowers to take out this kind of insurance. This type of insurance is usually expensive, so customers should consider carefully whether the insurance offered is worth the cost. In many cases, this kind of insurance is extremely poor value for money and can add a significant cost to the loan. In other cases, though the insurance may not seem expensive, it may provide very little protection should something go wrong; it may, for example, only cover the first two months of the period in which the borrower is not able to work so check the details carefully.

Only the borrower themselves can assess whether the insurance offered meets their needs. Consumers should never rely on a salesperson's description of the insurance cover offered and should always read the policy document themselves. If the salesperson is reluctant for a customer to read a policy, they could well have something to hide. A person who doesn't understand a policy should not sign it and should consult a trusted third party willing to explain it to them.

Financial institutions should not require borrowers to take out consumer credit insurance. If a borrower has been forced to take out insurance by the credit provider, they may have a right to claim compensation equal to the amount they have paid for the policy (see Consumer credit law, this section).

Consumer credit insurance is not the same as mortgage loan insurance, which home lenders often require a borrower to take out in certain circumstances (see Buying and selling real estate, chapter 5). Mortgage loan insurance doesn't protect a borrower who can't keep up with their house repayments. Rather, it protects the lending institution from a loss if it sells the property after a borrower's default, but does not recover sufficient funds to cover the amount owed on the loan. Moreover, the insurance company has the right to recover from the borrower any shortfall; that is, the amount they have paid to the lender.

Going guarantor

A guarantor is a person who agrees to make credit repayments on behalf of a borrower if the borrower can't or refuses to do so or goes bankrupt. Agreeing to be a guarantor means taking on a legal liability. Anyone contemplating 'going guarantor' should think carefully before entering into the contract of guarantee. They should ask themselves: why does the credit provider refuse to lend money to this borrower unless they have a guarantor? Invariably the answer is that the credit provider is not convinced of the prospective borrower's ability to pay back the loan for one of two main reasons. First, the proposed borrower may have a poor track record with credit or no track record at all, such as a young adult, or may, in the credit provider's view, have a poor stability profile (see Credit assessment, this section). Second, a borrower's financial situation may lead the credit provider to assess them as a bad risk. In either case, the credit provider usually has better access to information about the borrower than the guarantor does and is also more skilled at credit assessment. Trust the credit provider's judgment: a person should only 'go guarantor' if they are prepared to pay the debt themselves.

The NCC requires that the guarantor must be given a copy of the principal loan contract before the guarantee is entered into, and also a copy of the guarantee contract and a notice headed 'Things you should know about guarantees' which sets out a guarantor's general rights and obligations [NCC s.56]. Also, the guarantor should be given a copy of the contract of guarantee and the borrower's contract within 14 days of the contract becoming effective [NCC s.57].

A guarantor who has entered into a contract in unfair circumstances, for instance after having been misled, tricked or taken advantage of, may be able to rely on general consumer protection laws to escape liability (see Consumer protection laws, this section). This includes situations where a spouse or partner of a borrower also signs-up for the debt, as either co-borrower or guarantor, without realising the implications or because they have been subject to emotional pressure or unfair tactics. A person in this position may be able to escape liability if unfair tactics, unfair pressure, deception or so on have been used to coerce them to sign.

Some credit providers encourage a guarantor to sign as a co-borrower. A co-borrower has fewer rights than a guarantor even though they are jointly and severally liable for the credit from the outset and can be sued singly or with the other co-borrower(s) if there is a default on repayments. Unlike a guarantor, a co-borrower shares the benefit of the loan. A person who signs as a co-borrower but is really a guarantor, that is, they share no direct benefit from the loan, may be able to avoid liability. A person in such a position should seek legal advice immediately.

If the NCC applies there are various additional protections for guarantors (see Consumer protection laws, this section).

But I need a credit rating!

There is a common misconception that it is desirable to borrow money when young to establish a 'credit rating', but as explained below, there is no such thing. Financial institutions will take a person's previous experience into account when assessing whether to grant credit, but this is only one pertinent factor, and unless the past experience is bad, not a very important one. A financial institution will be far more interested in a potential borrower's ability to meet repayments, their stability profile and the quality of any security they offer, than whether or not they have borrowed before. This is particularly so in the case of housing loans. Financial institutions generally bend over backwards to grant housing loans, provided they are satisfied with the value of the property and the borrower's ability to meet repayments. A general rule of thumb regarding housing finance is that a borrower will have little trouble meeting repayments that are worth less than 30% of their gross income. It would be very unusual for the absence of previous credit experience to have any bearing on a decision to make a housing loan. On the other hand, a poor credit history would certainly have an effect, and a credit provider may be more likely to require the borrower to take out insurance to cover the risk of default.


Secured loans and mortgages

A secured loan is given when a borrower grants a credit provider security (usually as a mortgage) over particular property in return for the loan. Strictly speaking, a mortgage is a form of security that gives the credit provider the right to seize the property if the loan is not paid. Mortgages are generally associated with houses and land but can be applied to goods. Financial companies, for example, take a mortgage over the vehicles they finance. To be valid a mortgage must specify the property to be mortgaged [NCC s.44].

The NCC prohibits:
  • third party mortgages where the mortgagor is neither the borrower nor the guarantor [NCC s.48], for example where the proposed mortgagor is a spouse or partner of the borrower
  • mortgages securing an amount greater than the sum of a debtor's total liabilities and reasonable enforcement expenses [NCC s.49]
  • mortgages created over an employee's pay or superannuation [NCC s.50(1)]
  • mortgages created over 'essential household property' (unless special circumstances apply) [NCC s.50(2)]
  • mortgages secured by a cheque, bill of exchange or promissory note [NCC s.50(6)].

Default and repossession

When a mortgage has been granted and the borrower defaults, the credit provider can seize their property rather than having to resort to suing for the debt in court. If the mortgaged property is land, the seizure is called foreclosure or exercising the mortgagee's power of sale. The seizure of goods, such as a car, is commonly called repossession.

These powers can only be exercised once the borrower is in default. Most defaults occur because the borrower fails to make the payments on time or at all.

Once the borrower is in default, the credit provider must comply with any statutory requirements and adhere to any contractual terms limiting their right to seize the land or repossess the goods. Both the NCC and the Law of Property Act 2000 (LPA) provide some protection to a borrower. In addition to this, the Personal Property Securities Act 2009 (Cth) (PPSA) can impose additional requirements that the credit provider must comply with in order to properly reposossess goods. In order to reposessess certain types of goods, in some instances, a credit provider will be required to register their mortgage on the Personal Proporty Securities Register (PPSR). A failure to properly register their mortgage may result in a credit provider being unable to repossess the goods (particularly in instances where there are competing creditors)

Where land has been mortgaged, the LPA stipulates that the credit provider (also known as the mortgagee) cannot take action for one month from the default date or for the period provided for in the mortgage agreement. If the default has not been remedied in that time, they may notify the borrower (called the mortgagor) of their right to seize the property [LPA s.132], either in person or by leaving notice at the mortgaged property. If the borrower has not remedied the default within a further month from the date of the notice, the credit provider can sell the property. Though this process must be followed to sell a property, the credit provider can take court action to evict the borrower any time after the borrower has defaulted.

If the NCC does not apply, the terms of a credit contract may provide some protection regarding the repossession of goods. For example, some contracts require the credit provider to give notice prior to repossession, even where the LPA doesn't apply. Any contract that does not do so could be challenged as unfair.

Where the amount owing under the contract is less than 25% of the amount financed, the credit provider is not permitted to repossess the goods [NCC s.91.].

After selling the property or the repossessed goods, the credit provider must account to the borrower for any left over money, so that if the property is sold for more than the debt, the borrower must receive the difference, less the costs of repossession and sale. Where the proceeds of sale don't cover the debt, the borrower still owes the difference, which is treated like an ordinary debt and can be enforced in the courts (see Debts, chapter 9). In selling the property, the credit provider must act in good faith, but, unless the NCC applies, need not make every effort to get the best possible price for the property.

A mortgagor can't sell or assign property subject to a mortgage without the consent of the credit provider. This consent should be obtained in writing. Consent cannot be unreasonably withheld, nor can unreasonable conditions be attached to the consent by the credit provider [NCC s.51(1)].

Breaking a credit contract

At any time during the period of a regulated contract, a debtor or guarantor can write to their credit provider asking for a pay out figure for the loan and for details of how it was calculated. A payout figure must be provided within seven days of such a request [NCC s.83]. If this is not provided, an application can be made to the court for a determination of the pay out figure [NCC s.84].

Most defaults on credit contracts are due to failing to make repayments. The NCC provides some protection to borrowers before a credit provider can enforce their rights under the contract. The first of these, subject to some limited exceptions, provides that the credit provider must serve a notice on the borrower giving them 30 days in which to remedy the default [NCC s.88].

If a borrower under a credit contract doesn't pay and appropriate notices have been served, the credit provider can take legal action to recover money owed. Goods or property secured by the contract can be repossessed. If the contract is secured over property, they can evict the borrower and sell the land (see Default and repossession, this section).

If the credit is not secured, the money owed is treated like any other debt (see Debts, chapter 9). If the NCC applies, there are some restrictions on the actions of the credit provider (see Consumer protection laws, this section).

Where a borrower defaults on or breaks a credit contract, they will owe:
  • the amount borrowed
  • interest which has fallen due
  • any fees payable (which should all be detailed in the credit contract)
  • any enforcement costs, such as legal costs and the costs of repossession.

From this sum will be deducted payments made and any rebates owed on insurance paid as part of the loan. The usual types of insurance associated with credit contracts are consumer credit insurance (see Consumer credit insurance, this section) and insurance over property, such as car insurance. A proportional rebate on such insurance can be claimed from either the financier or direct from the insurance company.

National credit CODE

The NCC was introduced to replace the now defunct Consumer Creditor Code (CCC). ASIC is now the administrating body of the NCC. Its provisions are mostly the same as the provisions of the CCC (aside from some adminstrative differences applies to credit contracts entered into on or after 1 July 2010 where:
  • the lender is in the business of providing credit
  • a charge is made for providing the credit
  • the debtor is a natural person or strata corporation
  • the credit is provided:
    • for personal, domestic or household purposes, or
    • to purchase, renovate or improve residential property for investment purposes, or to refinance credit previously provided for this purpose

The NCC does not apply to certain loans, such as 'pay-day' loans (low cost short term credit loans (less than 62 days)), insurance premiums paid by instalments, bill facilities and staff loans.

Although the NCC does not apply to credit provided by pawnbrokers and where a beneficiary borrows against an estate, the courts have the power to reopen unjust transactions in these cases (see Unjust contracts, this section; Contracts and consumer protection, this chapter).

Importantly, the uniform legislation applies regardless of the amount of credit provided. However, the regulations to the NCC stipulate a monetary limit and exempt specified classes of credit providers.

Under the NCC, all credit is presumed to be regulated unless the creditor can prove the contrary [NCC s.13].

Regulation of credit contracts

The NCC states that a contract must be in writing [NCC s.14] and the credit provider is to furnish a prospective debtor with a pre-contractual statement [NCC s.16]. The following information must be contained in it:
  • the credit provider's name
  • the amount of credit or credit limit
  • all fees and charges
  • the amount of interest to be paid and the basis of calculation
  • details of instalment payments
  • details of any mortgage or guarantee
  • details of any commission paid by or to the credit provider
  • details of related insurance contracts
  • whether the interest rate is variable and how the debtor will be informed of the variation
  • how frequently statements will be sent
  • a statement that details the enforcement expenses and interest rates that may be incurred in the event of default.

These requirements are designed to ensure that a person can make an informed decision about entering into a credit contract. In addition to a pre-contractual statement, the credit provider must provide a prospective debtor with an information statement outlining their statutory rights and obligations. The statement must be written in plain English.

The NCC specifies how interest can be calculated and prohibits the payment of interest in advance [NCC s.29]. Other costs, such as establishment charges, early termination fees and transaction charges are all permitted, provided they are adequately disclosed to the person before they enter into the credit contract.

Unless there is a fixed repayment schedule, a credit provider must give a debtor a periodic statement of account, which must disclose [NCC ss.33]:
  • the period covered by the statement
  • opening and closing balances
  • particulars of credit provided
  • interest and fees charged
  • payments to or from the account
  • any corrections to the previous statement.

The statement is designed to advise a debtor on the progress of their account and of any changes in the terms and conditions, including changes in the interest rate.

A person who disputes details in a statement may give a written notice to the credit provider. The credit provider then must explain in detail how the liability arose. In such circumstances the credit provider cannot take legal action to enforce the disputed debt until at least 30 days have elapsed from the time the explanation was given. If a dispute can't be resolved, either the debtor or the creditor can apply to a court for a resolution [NCC s.38].

Variation of grounds of hardship

Division 3 of the NCC allows a person experiencing a period of hardship to apply to the credit provider for a variation of their contract. Where the credit provider doesn't agree to vary the contract, the debtor can apply to the Local Court. A court can stop a credit provider from enforcing the contract until it has made a decision [NCC s.74]. In addition, a credit provider can also apply to a court for variation of the contract [NCC s.75].

Unjust contracts

To reduce or void a consumer's liability to pay [NCC s.76], the NCC gives the courts the power to reopen any unjust contract, mortgage, guarantee or transaction.

To determine whether a transaction is unjust, a court can take into account a range of factors, including whether the credit provider or any other person used unfair pressure or tactics or undue influence to secure the credit contract or guarantee.

Enforcement against Guarantor

The NCC specifies that, before a credit provider can enforce a guarantee, it must first (except in limited circumstances), obtain or attempt to obtain judgment against the debtor [NCC s.90] (see Debts , chapter 9).

Breach of a key requirement by the credit provider

Where a credit provider breaches a specified key requirement, the NCC provides for a civil penalty, generally involving forfeiture of the right to collect interest from the debtor. Key requirements include failing to disclose certain information in the pre-contractual statement and statement of account, such as the interest rate, fees or charges [NCC ss.113-114]. A credit provider that wishes to be relieved from all or part of the penalty, that is, that wants their right to claim interest restored, has to take other action for relief, such as:
  • applying to the court to restore interest charges. The court must consider the creditor's actions, including whether the breach was deliberate, what preventative measures existed and what action was taken to rectify the breach and compensate debtors. In addition, the court must consider what damages debtors have suffered, the time taken to resolve the matter and any other relevant circumstance.
  • rectifying any breach within 12 months of it occurring (or longer) and before a debtor takes legal action.
  • seeking a ruling from the court that the breach was only a minor error; that is, an error made in good faith and one unlikely to disadvantage consumers significantly.


Under the NCC all credit contracts, guarantees and notices must be easy to read and clearly expressed. The NCC permits the publishing of model documentation by various entities. A document that conforms with the model can't be called into question on the grounds of form, legibility or comprehensibility.

Going to court

Where a consumer feels their rights have been breached or their contract is unjust or was entered into under unfair circumstances, they make take action in the courts. It would be wise to obtain legal advice before commencing proceedings in court. The relevant jurisdiction would be determined by the amount being saught in the courts.

Credit Rating

Credit assessment

Credit providers are eager to lend money because it is their business to make a profit from the interest and from other loan charges and 'add on' products, like insurance, sold with the loan. However, they will not make a profit if too many of their customers default. Accordingly, credit providers take steps to ensure that customers meet their obligations.

The process of deciding whether to lend to a particular individual is called credit assessment. This process takes into account the proposed borrower's:
  • credit history
  • financial situation
  • stability.

Credit reporting

At present there are are a number of credit reporting agencies in Australia (including Veda Advantage, Illion and Experian).

What Credit Reporting Agencies do

Credit reporting agencies hold information about a person's credit history, and provides it in the form of a credit report to credit providers.

It does not itself assess someone's creditworthiness or give a credit rating.

What information is held

Credit reporting agencies hold credit information files contain information about:
  • current credit providers
  • applications for credit
  • any defaults.

Defaults that can be recorded

The types of defaults that can be recorded are discussed below.

Payment defaults

The payment must be at least 60 days overdue, and the credit provider must have:
  • advised the borrower in writing that the payment is overdue, and
  • requested payment.

Dishonoured cheques

The amount of the cheque must exceed $100, and the cheque must have been presented and dishonoured twice.

Court judgments

This category does not include tribunal judgments.

The judgment need not relate to credit; for example, a motor accident claim or other litigation can be recorded.

Bankruptcy orders

Only bankruptcy orders can be recorded, not debtors' or creditors' petitions, or schemes of arrangement.

Serious credit infringements

This category covers:
  • fraudulent attempts to obtain credit or evade credit obligations
  • actions indicating an intention not to pay (for example, moving without leaving a forwarding address).

Information for identification purposes

Credit reporting agencies holds some information purely for identification purposes - name, sex, current address, previous two addresses and driver's licence number.

What information is not held

There is no provision for:
  • positive information, such as that a loan was paid early or payments have always been made on time, or
  • information about a person's assets or income.

Regulation of credit reporting

Credit reporting agencies' use and disclosure of credit information files is controlled and limited by:
  • privacy legislation
  • a legally enforceable code of conduct issued by the Privacy Commissioner under the Privacy Act 1988 (Cth).

The code of conduct can be accessed via the website of the Office of the Federal Privacy Commissioner (see Contact points).

Automatic deletion of information

Different types of information held by these agenciesmust be deleted after certain periods [PA s.18F].

These are:
  • credit inquiries - after five years
  • current credit providers - 14 days after notification by the credit provider that they no longer provide credit to the person (the credit provider must advise Baycorp Advantage within 45 days of ceasing to provide the credit)
  • payment defaults - five years from when Baycorp Advantage was informed of the overdue payment
  • dishonoured cheques - five years from the date of the second dishonouring
  • court judgments - five years from the date of judgment
  • bankruptcy orders - seven years from the date of the order
  • serious credit infringements - seven years from the date the information was included in the file.

Who has access?

Access to the information held by these agencies is available only to:
  • credit providers
  • individual consumers (only their own personal information).

Who does not have access?

Real estate agents, insurers, government licensing bodies and debt collection agencies are no longer entitled to access this information.

Obtaining a credit report

A person can obtain a copy of their own credit report by making a signed, written request (see Contact points).

Information required

These agencies will require certain details for identification purposes, including full name, sex, current address, previous two addresses, date of birth, and driver's licence number.

Reasons for wanting the report

These agencies may request a reason for the request be given, though no particular reason is necessary to obtain a copy of the record. It is usually enough for the applicant to say that they want to check that their record is accurate.

Inaccurate information

Both the agencies and the credit providers who give them information are obliged to take reasonable steps, including making corrections, deletions and additions, to ensure the information in credit information files and credit reports is accurate, up-to-date, complete, and not misleading.

If an amendment is required

If a person requests an amendment to a file entry, the agency must, within 30 days, either amend the entry as requested, or advise the consumer of:
  • the reason for the amendment not being made
  • the consumer's right to have a statement attached to the disputed entry detailing the requested amendment, and
  • the consumer's right to make a complaint to the Privacy Commissioner.

Reports that contain false or misleading information

Credit reporting agencies and credit providers are not permitted to give a report that contains false or misleading information. If such information is given knowingly or recklessly, they may be guilty of a criminal offence.

Complaints to the Privacy Commissioner

Under the Privacy Act 1988 (Cth), a person can complain to the Office of the Australian Information Commissioner about any act or practice that may interfere with their privacy.

Assistance with making a complaint

The staff of the Office of the Australian Information Commissioner (and the Commonwealth Ombudsman) will assist the consumer in making a complaint.

What the OAIC can do

The OAIC can:
  • obtain information and documents from any person or body
  • examine witnesses
  • conduct compulsory conferences to conciliate a complaint.

If the complaint is substantiated

If the commissioner decides that the complaint is substantiated the respondent can be ordered to pay compensation for any loss or damage, including for humiliation or injury to feelings.

The determination does not bind any of the parties until it is registered in the Federal Court.


The respondent can appeal to the Federal Court, and in some circumstances may apply to the Administrative Appeals Tribunal for a review of the determination .

Credit refusals

If an application for credit is refused by a credit provider, and the refusal is wholly or partly based on information contained in a credit report, the credit provider must advise the person in writing that the refusal is for that reason, and of their right of access to the credit report from the agency.

If a credit provider refuses an application for credit on any other basis, they do not have to give the person a reason for the refusal.

Credit union and building society codes of practice

Credit unions and building societies have developed a code of practice, based on the Code of Banking Practice (see Banking, chapter 8), setting out principles of conduct towards consumers.

Once a code is adopted by a credit union or building society, it is binding on that institution and forms part of the contractual relationship between it and the consumer.

The codes cover matters such as disclosure of information to borrowers and customers, advertising, notice of changes to interest rates and fees, and so on.

The codes also require that there be a free external dispute resolution scheme to which a consumer may take any complaint in relation to the code (similar to the Australian Banking Industry Ombudsman scheme).

The Australian Securities and Investments Commission is the consumer protection regulator in the financial services industry for non-credit matters. This extends to monitoring codes of practice for building societies and credit unions.

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