In the latter two examples, if the affordability of the credit product relies on the third party continuing to pay the borrower’s expenses, the lender should consider whether the third party supporting should be a co- borrower or, if not receiving a benefit under the product, a guarantor. [...] Reasonable Information Exchange We endorse the recommendation of the Consumer Action Law Centre, Financial Rights Legal Centre, Consumer Credit Legal Service and Financial Counselling Australia that information should be requested first from the financial firm, and only from the consumer in the event that the financial firm would not be reasonably required to hold the information. [...] In addition, RLC is aware of examples where a financial firm has provided information which is personally sensitive to the complainant and not relevant to AFCA’s assessment of the complaint, but the case managers have placed the information on the file. [...] In many cases where the complainant is unable to provide full information to AFCA, it is because they did not provide information to support the application – the perpetrator did, either explicitly or under the guise of the complainant – or the complainant did so in circumstances of serious coercion. [...] We recommend including at page 23 further examples where a lender should take particular care where a broker is involved in a transaction, to also capture circumstances where the credit provider is aware that the broker is an associate of one of the co-borrowers or is an associate of the partner of the borrower or a third party who could obtain a benefit from the loan.
- Pages
- 12
- Published in
- Australia
Table of Contents
- 1. Summary of Recommendations 2
- 2. Introduction Redfern Legal Centre 3. RLCs work in consumer credit and domestic and family violence 3
- Approach RLC DFV 3
- 4. Specific Comments on the Approach 4
- 4.1. Risk of Consumer Harm 4
- 4.1.1. Harm is Proportional to Consumers Financial Position 5
- 4.1.2. Indicators of Experience of Vulnerability 5
- 4.1.3. Lesser Weight to be Placed Upon Self-Assessments or Estimates 6
- Case Study Joelene 6
- 4.1.4. Onus on Financial Firms to Justify Reasonableness of Inquiries 7
- 4.1.5. Reasonably Foreseeable Events 7
- 4.1.6. Requirements and Objectives Assessment 8
- Case Study Lynette 8
- Case Study Kaitlyn 9
- 4.1.7. Conditional Approvals to be Required to be Effective 9
- Case Study Joelene continued 10
- 4.2. Reasonable Information Exchange 10
- Case Study Charlotte 10
- Case Study Charlotte continued 11
- 4.3. Conduct of the Parties and Third Parties 12
- 4.3.1. Perpetrators as Parties 12
- 4.3.2. Brokers 12
