Prohibitions relating to credit contracts if the annual cost rate exceeds 48%
32A Prohibitions relating to credit contracts if the annual cost rate exceeds 48%
Entering into a credit contract
A credit provider must not enter into a credit contract if the annual cost rate of the contract exceeds 48%.
Criminal penalty: 50 penalty units.
Provision of credit assistance
A person must not provide credit assistance to a consumer by suggesting that the consumer apply, or assisting the consumer to apply, for a particular credit contract with a particular credit provider if the person knows, or is reckless as to whether, the annual cost rate of the contract exceeds 48%.
Criminal penalty: 50 penalty units.
If a person provides credit assistance to a consumer that is prohibited by subsection (2):
the consumer is not liable (and is taken never to have been liable) to pay any fees or charges to the person in relation to:
the credit assistance; or
any other services provided by the person in connection with the credit assistance; and
the consumer may recover as a debt due to the consumer the amount of any such fees or charges paid by the consumer to the person.
Application
This section does not apply if:
the credit provider is an ADI; or
the credit contract is a low cost credit contract, small amount credit contract or bridging finance contract.
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