THINGS YOU SHOULD KNOW ABOUT YOUR PROPOSED CREDIT CONTRACT
This statement tells you about some of the rights and obligations of yourself and your credit provider. It does not state the terms and conditions of your contract.
If you have any concerns about your contract, contact the credit provider and, if you still have concerns, your credit provider’s external dispute resolution scheme, or get legal advice.
1. How can I get details of my proposed credit contract?
Your credit provider must give you a pre-contractual statement containing certain information about your contract. The pre-contractual statement, and this document, must be given to you before:
- your contract is entered into; or
- you make an offer to enter into the contract;
whichever happens first.
2. How can I get a copy of the final contract?
If the contract document is to be signed by you and returned to your credit provider, you must be given a copy to keep.
Also, the credit provider must give you a copy of the final contract within 14 days after it is made. This rule does not, however, apply if the credit provider has previously given you a copy of the contract document to keep.
If you want another copy of your contract, write to your credit provider and ask for one. Your credit provider may charge you a fee. Your credit provider has to give you a copy:
- within 14 days of your written request if the original contract came into existence 1 year or less before your request; or
- otherwise within 30 days of your written request.
3. Can I terminate the contract?
Yes. You can terminate the contract by writing to the credit provider so long as;
- you have not obtained any credit under the contract; or
- a card or other means of obtaining credit given to you by your credit provider has not been used to acquire goods or services for which credit is to be provided under the contract.
However, you will still have to pay any fees or charges incurred before you terminated the contract.
4. Can I pay my credit contract out early?
Yes. Pay your credit provider the amount required to pay out your credit contract on the day you wish to end your contract.
5. How can I find out the payout figure?
You can write to your credit provider at any time and ask for a statement of the payout figure as at any date you specify. You can also ask for details of how the amount is made up.
Your credit provider must give you the statement within 7 days after you give your request to the credit provider. You may be charged a fee for the statement.
6. Will I pay less interest if I pay out my contract early?
Yes. The interest you can be charged depends on the actual time money is owing. However, you may have to pay an early termination charge (if your contract permits your credit provider to charge one) and other fees.
7. Can my contract be changed by my credit provider?
Yes, but only if your contract says so.
8. Will I be told in advance if my credit provider is going to make a change in the contract?
That depends on the type of change. For example:
- you get at least same day notice for a change to an annual percentage rate. That notice may be a written notice to you or a notice published in a newspaper.
- you get 20 days advance written notice for:
- a change in the way in which interest is calculated; or
- a change in credit fees and charges; or
- any other changes by your credit provider;
except where the change reduces what you have to pay or the change happens automatically under the contract.
9. Is there anything I can do if I think that my contract is unjust?
Yes. You should first talk to your credit provider. Discuss the matter and see if you can some to some arrangement.
If that is not successful, you may contact your credit provider’s external dispute resolution scheme. External dispute resolution is a free service established to provide you with an independent mechanism to resolve specific complaints. Your credit provider’s external dispute resolution provider is the Financial Ombudsman Service and can be contacted by telephone on 1300 78 08 08, by address at GPO Box 3, Melbourne, Victoria 3001 or alternatively visit the website at www.fos.org.au.
Alternatively you can go to court. You may wish to get legal advice, for example from your community legal centre or Legal Aid.
You can also contact ASIC, the regulator, for information on 1300 300 630 or through ASIC’s website at http://www.asic.gov.au.
10. Do I have to take out insurance?
Your credit provider can insist you take out or pay the cost of types of insurance specifically allowed by law. These are compulsory third party personal injury insurance, mortgage indemnity insurance, or insurance over property covered by any mortgage. Otherwise, you can decide if you want to take out insurance or not. If you take out insurance, the credit provider cannot insist that you use any particular insurance company.
11. Will I get details of my insurance cover?
Yes, if you have taken out insurance over mortgaged property or consumer credit insurance and the premium is financed by your credit provider. In that case the insurer must give you a copy of the policy within 14 days after the insurer has accepted the insurance proposal.
Also, if you acquire an interest in any such insurance policy which is taken out by your credit provider then, within 14 days of that happening, your credit provider must ensure you have a written notice of the particulars of that insurance.
You can always ask the insurer for details of your insurance contract. If you ask in writing, your insurer must give you a statement containing all the provisions of the contract.
12. If the insurer does not accept my proposal, will I be told?
Yes, if the insurance was to be financed by the credit contract. The insurer will inform you if the proposal is rejected.
13. In that case, what happens to the premiums?
Your credit provider must give you a refund or credit unless the insurance is to be arranged with another insurer.
14. What happens if my credit contract ends before any insurance contract over mortgaged property?
You can end the insurance contract and get a proportionate rebate of any premium from the insurer.
15. If my contract says I have to give a mortgage, what does this mean?
A mortgage means that you give your credit provider certain rights over any property you mortgage. If you default under your contract, you can lose that property and you might still owe money to the credit provider.
16. Should I get a copy of my mortgage?
Yes. It can be part of your credit contract or, if it is a separate document, you will be given a copy of the mortgage within 14 days after your mortgage is entered into.
However, you need not be given a copy if the credit provider has previously given you a copy of the mortgage document to keep.
17. Is there anything I am not allowed to do with the property I have mortgaged?
The law says you cannot assign or dispose of the property unless you have your credit provider’s, or the court’s, permission. You must also look after the property. Read the mortgage document as well. It will usually have other terms and conditions about what you can or cannot do with the property.
18. What can I do if I find that I cannot afford my repayments and there is a mortgage over property?
- See the answers to questions 22 and 23.
Otherwise you may:
- if the mortgaged property is goods, give the property back to your credit provider, together with a letter saying you want the credit provider to sell the property for you;
- sell the property, but only if your credit provider gives permission first; OR
- give the property to someone who may then take over the repayments, but only if your credit provider gives permission first.
If your credit provider won’t give permission, contact their external dispute resolution scheme for help.
If you have a guarantor, talk to the guarantor who may be able to help you.
You should understand that you may owe money to your credit provider even after the mortgaged property is sold.
19. Can my credit provider take or sell the mortgaged property?
Yes, if you have not carried out all your obligations under your contract.
20. If my credit provider writes asking me where the mortgaged goods are, do I have to say where they are?
Yes. You have 7 days after receiving your credit provider’s request to tell your credit provider. If you do not have the goods you must give your credit provider all the information you have so they can be traced.
21. When can my credit provider or its agent come into a residence to take possession of mortgaged goods?
Your credit provider can only do so if it has the court’s approval or the written consent of the occupier which is given after the occupier is informed in writing of the relevant section in the National Credit Code.
22. What do I do if I cannot make a repayment?
Get in touch with your credit provider immediately. Discuss the matter and see if you can come to some arrangement. You can ask your credit provider to change your contract in a number of ways:
- to extend the term of the contract and reduce payments;
- to extend the term of your contract and delay payments for a set time; or
- to delay payments for a set time.
23. What if my credit provider and I cannot agree on a suitable arrangement?
If the credit provider refuses your request to change the repayments, you can ask the credit provider to review this decision if you think it is wrong.
If the credit provider still refuses your request you can complain to the external dispute resolution scheme that your credit provider belongs to. Further details about this scheme are set out below in question 25.
24. Can my credit provider take action against me?
Yes, if you are in default under your contract. But the law says that you cannot be unduly harassed or threatened for repayments. If you think you are being unduly harassed or threatened, contact the credit provider’s external dispute resolution scheme or ASIC, or get legal advice.
25. Do I have any other rights and obligations?
Yes. The law will give you other rights and obligations. You should also READ YOUR CONTRACT carefully.
IF YOU HAVE ANY COMPLAINTS ABOUT YOUR CREDIT CONTRACT, OR WANT MORE INFORMATION, CONTACT YOUR CREDIT PROVIDER. YOU MUST ATTEMPT TO RESOLVE YOUR COMPLAINT WITH YOUR CREDIT PROVIDER BEFORE CONTACTING YOUR CREDIT PROVIDER’S EXTERNAL DISPUTE RESOLUTION SCHEME. IF YOU HAVE A COMPLAINT WHICH REMAINS UNRESOLVED AFTER SPEAKING TO YOUR CREDIT PROVIDER YOU CAN CONTACT YOUR CREDIT PROVIDER’S EXTERNAL DISPUTE RESOLUTION SCHEME OR GET LEGAL ADVICE.
EXTERNAL DISPUTE RESOLUTION IS A FREE SERVICE ESTABLISHED TO PROVIDE YOU WITH AN INDEPENDENT MECHANISM TO RESOLVE SPECIFIC COMPLAINTS. YOUR CREDIT PROVIDER’S EXTERNAL DISPUTE RESOLUTION PROVIDER IS THE FINANCIAL OMBUDSMAN SERVICE AND CAN BE CONTACTED BY TELEPHONE ON 1300 78 08 08, BY ADDRESS AT GPO BOX 3, MELBOURNE, VICTORIA 3001 OR ALTERNATIVELY VISIT THE WEBSITE AT WWW.FOS.ORG.AU.
PLEASE KEEP THIS INFORMATION STATEMENT. YOU MAY WANT SOME INFORMATION FROM IT AT A LATER DATE.