From 1 July 2010, consumer credit will be regulated by ASIC under the National Consumer Credit Protection Act 2009 (National Credit Act). Under the new laws, people who provide or assist other people with consumer credit will need to be licensed by ASIC, or be a representative of someone who is already licensed.
Businesses that allow customers to book up or run up a tab, thereby allowing customers to buy goods or services and pay later are providing a type of consumer credit. Anyone who provides this service, and charges a fee for doing so, is likely to need to apply to ASIC for an Australian credit licence (or be a representative of a licensee) and comply with some other new requirements from 1 July 2010, such as disclosure and responsible lending.
‘Book up’ is a common practice in many remote and regional communities of Australia, particularly many Indigenous communities. ASIC has published a free fact sheet to help book up traders determine whether the new laws apply to their business. A copy of the fact sheet, titled
New credit laws and book up: what you need to know, is available by calling ASIC’s Infoline on 1300 300 630 or from the ASIC website at www.asic.gov.au/credit.
ASIC encourages all book up traders to read this fact sheet and get advice so they can work out whether the new laws affect them and make a decision about whether they need to be licensed. There are civil and criminal penalties under the National Credit Act for businesses that provide regulated credit (including some book up arrangements) without a credit licence or authorisation.
Anyone who thinks they may need a credit licence, or would like more information, should contact ASIC as soon as possible by calling ASIC’s Infoline on 1300 300 630.
More information about the new credit regime, licensing requirements and other obligations associated with the new regime is available from the ASIC website at www.asic.gov.au/credit.
For further information:
ASIC Media Unit
Telephone: 1300 208 215
Email: media.unit@asic.gov.au
Read online: National credit laws and book up: what you need to know