A Westpac-owned car financier has had to pay almost $500,000 in penalties after a major National Consumer Credit Protection Act (NCCP) breach.
Capital Finance Australia, a subsidiary of Westpac, has paid penalties totalling $493,000 after ASIC found it breached the NCCP in relation to the repossession of motor vehicles.
When consumers default on their repayment obligations, the NCCP requires lenders to send written default notices containing specific information about what the lender is proposing to do, how long the consumer has to remedy the default, and what the consumer's rights and obligations are.
However, ASIC found that between March 2015 and June 2015, Capital Finance failed on 55 occasions to provide customers with default notices prior to commencing enforcement proceedings to repossess mortgaged vehicles.
On a further three occasions, the car financier did not provide customers with legally required information setting out their rights and the options available to them within the required time frame after it repossessed mortgaged vehicles.
“It is crucial that credit providers engage responsibly with consumers who are having difficulty in making their repayments and who may be experiencing financial hardship,” ASIC deputy chairman Peter Kell said.
“Having a car repossessed can have a significant impact on a consumer, and car financiers must ensure that key information is provided to consumers. ASIC will act against licensees who fail to meet these obligations.”