National Consumer Credit Protection Act 2009

A licensee must conduct an investigation into a reportable situation in accordance with this section if:

the licensee, or a representative of the licensee, has provided credit assistance to a consumer (the affected consumer) in relation to a credit contract secured by a mortgage over residential property; and

the licensee, or the representative of the licensee, is a mortgage broker; and

there are reasonable grounds to believe that a reportable situation has arisen in relation to the licensee as mentioned in:

paragraph 50A(1)(a) (significant breach of a core obligation); or

subsection 50A(2) (gross negligence or serious fraud); and

there are reasonable grounds to suspect that:

the affected consumer has suffered or will suffer loss or damage as a result of the reportable situation; and

the affected consumer has a legally enforceable right to recover the loss or damage from the licensee.

The investigation must be commenced within 30 days after the licensee first knows of, or is reckless with respect to, the circumstances mentioned in paragraphs (1)(a), (b), (c) and (d).

In conducting the investigation, the licensee must:

identify the conduct that gave rise to the reportable situation; and

quantify the loss or damage that there are reasonable grounds to believe:

the affected consumer has suffered or will suffer as a result of the reportable situation; and

the affected consumer has a legally enforceable right to recover from the licensee; and

do anything else prescribed by the regulations for the purposes of this paragraph.

The investigation must be completed as soon as is reasonably practicable after it is commenced.

The licensee must take reasonable steps to give the affected consumer a notice of the outcome of the investigation:

in writing within 10 days after the investigation is completed; and

if ASIC has approved the form in which the notice must be given:

in the approved form; and

that includes the information, statements, explanations or other matters required by the form; and

that is accompanied by any other material required by the form.

A licensee has qualified privilege in relation to a notice given under subsection (5).

A licensee who has qualified privilege under subsection (6) in respect of conduct is also not liable for any action based on breach of confidence in relation to that conduct.

If, after the investigation is completed, there are reasonable grounds to believe that:

the affected consumer has suffered or will suffer loss or damage as a result of the reportable situation; and

the affected consumer has a legally enforceable right to recover the loss or damage from the licensee;

Nothing in this section affects any legally enforceable right of the affected consumer to recover loss or damage that the affected consumer suffers, or will suffer, as a result of a reportable situation.

However, a court may take into account the amount paid by the licensee under this section when quantifying the amount of compensation (if any) to be paid by the licensee in relation to that loss or damage.