Consumer Credit Legal Service (WA) is pleased to contribute to the inquiry by the Federal Senate Standing Committees on Economics on consumer protection in the banking, insurance and financial sector inquiry.
CCLSWA’s submission focuses on the inadequate consumer protection for individuals who provide guarantees for small business loans. In particular, we argued that these individuals are consumers who may not be connected with the business directly but provide a personal guarantee for money lent to the business. Currently they would receive no protection under the National Credit Code.
The submission addresses the following issues:
- The inadequacy of current laws and regulatory framework
- The impact of misconduct on such consumers
- The need for legislative change to protect consumers who provide guarantees for small business loans, given that they are consumers themselves who receive no actual benefit from the loan.
In the submission, CCLSWA discusses cases focusing on the relationship that exists between a parent and adult child and the relationship between husband and wife who have entered into a transaction concerning guarantees.
Read the full submission here.
CCLSWA advises clients on consumer credit issues such as guarantees, especially where the person providing the guarantee receives no benefit. If you require advice with regard to consumer credit issues in relation to loan and guarantee transactions, please call our advice line on (08) 9221 7066 for a free, confidential discussion.