The new National Consumer Credit Protection Legislation 2009 took effect on 1 April 2010. Under the new laws, if you currently engage in credit activities under State or Territory Legislation, and you want to continue to engage in credit activities from 1 July 2010, you may need to be registered with ASIC. Generally, a person or business who is involved in credit activities is engaged in the following:
- Credit contracts;
- Consumer leases;
- Mortgages; and
- Guarantees.
This also includes the hiring of goods for personal, domestic or household purpose such as a television or refrigerator for example.
The primary purpose of the new legislation is to:
- help protect consumers
- remove inconsistencies within and between businesses and
- better regulate and standardise Australia’s consumer credit laws on a National level, rather than on a State level.
As a business, in order to register, you must complete an application form and lodge it with ASIC. Registration closes on 30 June 2010. If you are not registered with ASIC by 1 July 2010, you must stop engaging in credit activities until you either become registered or have an Australian Credit Licence.
Registered entities will also be required to apply to ASIC for a Credit License between 1 July 2010 and 31 December 2010. The main types of businesses who will require a licence include providers of credit such as banks, and providers of credit services, for example credit and mortgage brokers. Once registered, in order to conduct credit activities you must adhere to the conduct obligations.
Understandably this new Legislation can be a little confusing. If you are unsure if you need to register or if you have any queries about the new National Consumer Credit Protection Legislation contact our experienced legal team. Click here to submit an online enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to make an appointment.
