Prohibition on proscribed referrals
160G Prohibition on proscribed referrals
Prohibition
A licensee that carries on a business of providing credit under small amount credit contracts must not make a proscribed referral if:
the licensee is a constitutional corporation; or
the referral is made in the course of carrying on that business; or
the referral is made in the course of carrying on the business of banking, other than State banking (within the meaning of paragraph 51(xiii) of the Constitution) not extending beyond the limits of the State concerned; or
the referral is made using a service to which paragraph 51(v) of the Constitution applies.
Civil penalty: 5,000 penalty units.
What is a proscribed referral?
A referral of one or more persons (the referred persons) to another person or persons (the recipients of the referral) is a proscribed referral if, at the time when the referral is made, it is reasonable to believe that one or more of the referred persons would or might, as a direct or indirect result of the referral (including as a result of conduct that any of the recipients of the referral engages in as a result of the referral), enter into a contract or arrangement that satisfies the following conditions:
under the contract or arrangement, credit is to be, or may be, provided to the referred person;
the provision of that credit under the contract or arrangement would not be a provision of credit to which the National Credit Code applies.
For the kinds of provision of credit to which the National Credit Code does or does not apply, see sections 5 and 6 of that Code.
For the purposes of subsection (2), a recipient of a proscribed referral need not be a person who would or might be a provider of credit under a contract or arrangement of the kind mentioned in that subsection.
For the purposes of subsection (2), a referral of one or more persons to another person or persons includes (but is not limited to) the provision of information about the first‑mentioned person or persons to the second‑mentioned person or persons, whether or not the first‑mentioned person or persons are aware of the provision of that information.
To avoid doubt, it does not matter for the purposes of subsection (2) whether any person actually has, or had, the belief mentioned in that subsection.
Part 4—Avoidance
National Consumer Credit Protection Act 2009
60 Subsection 5(1)
Insert:
avoidance purpose: see subsection 323A(2).
constitutional corporation means a corporation to which paragraph 51(xx) of the Constitution applies.
constitutional trade and commerce means trade and commerce:
between Australia and places outside Australia; or
between the States; or
between a State and a Territory; or
between 2 Territories; or
within a Territory.
scheme means:
any agreement, arrangement, understanding, promise or undertaking, whether express or implied; or
any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise; or
any combination of 2 or more things that are schemes because of paragraph (a) or (b).
61 Section 323
After:
This Part deals with miscellaneous matters.
insert:
Division 1A has rules that prohibit schemes that are designed to avoid the application of this Act in relation to small amount credit contracts and consumer leases or to avoid the application of product intervention orders.
62 After Division 1 of Part 7‑1
Insert:
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