124 Prohibition on suggesting to consumers to remain in unsuitable credit contracts
Prohibition on suggesting to remain in unsuitable contracts
(1) A licensee must not provide credit assistance to a consumer by suggesting that the consumer remain in a particular credit contract with a particular credit provider if the contract is unsuitable for the consumer under subsection (2).
Civil penalty: 2,000 penalty units.
When the contract is unsuitable
(2) The credit contract is unsuitable for the consumer if, at that time the licensee provides the credit assistance:
(a) the consumer is, or is likely to be, unable to comply with the consumer’s financial obligations under the contract, or only able to comply with substantial hardship; or
(b) the contract does not meet the consumer’s requirements or objectives; or
(c) if the regulations prescribe circumstances in which a credit contract is unsuitable—those circumstances apply to the contract.
(3) For the purposes of paragraph (2)(a), it is presumed that, if the consumer could only comply with the consumer’s financial obligations under the contract by selling the consumer’s principal place of residence, the consumer could only comply with those obligations with substantial hardship, unless the contrary is proved.