Page 4629 - Week 15 - Thursday, 21 November 1991
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copies, I would like to remind them that their comments should be lodged by 30 November. Interested members of the public may obtain copies of the draft uniform Bill from the Consumer Affairs Bureau.
Returning to the Bill at hand: Members will note that the amendments contained in this Bill address problems arising from the operation of the civil penalty provisions of the Act. These provisions operate in such a way that credit providers who fail to disclose to borrowers the prescribed financial information about the contract lose the right to collect any credit charges due under the contract. To regain the right to collect these charges, credit providers must apply to the Credit Tribunal for an order restoring the borrower's liability to pay the charge.
In late 1990 and early 1991, two national credit providers, the State Bank of New South Wales and Westpac, were discovered to have breached the disclosure provisions in the Act in at least 650,000 credit contracts Australia-wide. The directors and commissioners of consumer affairs in the uniform credit States met to discuss this situation. They agreed to recommend to their respective governments mechanisms to assist their credit tribunals to deal with the large number of applications involving such a vast number of contracts. The ACT Government has agreed to adopt these recommendations, which are implemented in this amending Bill. Similar Bills have already been passed by the Victorian and New South Wales parliaments.
This Bill contains mechanisms to deal with two types of breaches of the disclosure provisions of the Act. The first type, which can be characterised as a technical breach, covers some 3,500 contracts made in the Australian Capital Territory. These breaches occurred because the credit providers did not disclose insurance commission payable under the contracts in the contract documentation itself. However, the information was provided in insurance certificates attached to, but not forming part of, the credit contract.
In this case, as the borrowers have suffered no detriment, the Government has agreed to amend the Act to validate these contracts retrospectively. This will restore the credit providers' right to collect all credit charges. The amending provisions are set out in clause 8 of the Bill. Only a limited class of contracts will be covered by this retrospective validation, and only because the information was provided to the credit consumers, although not on the precise document that it ought to have been provided on. Because the majority of breaches cannot be characterised as merely technical, they remain to be dealt with by the tribunal. It is necessary, therefore, to give the tribunal additional procedural powers to assist it to hear applications involving a large number of contracts.
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