ASIC is currently undertaking a review into the car finance industry’s compliance with responsible lending, debt collection and hardship obligations. ASIC says it intends to publish a report in early 2020 and will assess whether further regulatory action is required.
ASIC has also announced that it has commenced proceedings in the Federal Court of Australia against Volkswagen Financial Services Australia Pty Limited (Volkswagen) for alleged breaches of the responsible lending provisions of the National Consumer Credit Protection Act 2009 (Cth) (National Credit Act).
Volkswagen operates nationally to provide borrowers with consumer loans to purchase new and used cars.
ASIC alleges between 20 December 2013 and 15 December 2016, Volkswagen contravened the responsible lending provisions of the National Credit Act in relation to 49,380 loan contracts by:
- not making reasonable inquiries about borrowers’ living expenses in contravention of ss 128(d) and 130(1)(b) of the National Credit Act in relation to a subset of the loans;
- not taking reasonable steps to verify borrowers’ living expenses in contravention of ss 128(d) and 130(1)(c) of the National Credit Act in relation to each of the loans; and
- not making an assessment in accordance with s 129 of the National Credit Act in relation to whether each of the loan contracts was unsuitable for the relevant consumer, in contravention of s128(c) of the National Credit Act.
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Author: David Jacobson
Principal, Bright Corporate Law
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.