Deck 35: Consumer Credit and Privacy

Question 1

Which of the following is the best definition of a 'tied loan contract'?

A) A credit contract in which the credit provider is the borrower's employer and the loan is tied to the borrower's continued employment.
B) A credit contract whereby the borrower gives the credit provider rights to assets owned by the borrower to secure repayment under a credit contract.
C) A credit contract entered into to pay for goods or services provided by a supplier who referred the borrower to the credit provider.
D) A credit contract in which multiple advances of credit are contemplated and the amount of available credit increases as the debt is reduced.

Answer 1

C

Question 2

Which of the following is unlikely to entitle the borrower to apply for relief under the hardship provisions of the National Credit Code?

A) Francine quits her job after an argument with her boss.
B) Edgar goes overseas to visit relatives and decides to stay.
C) Donna is unable to work after a serious car accident.
D) All of the above.

Answer 2

B

Question 3

The National Credit Code only applies if the debtor is a natural person.

Answer 3

False

Question 4

Which of the following is NOT an exception to the National Credit Code?

A) Loans to natural persons for investment purposes.
B) Payment of insurance premiums by instalments.
C) Short term loans.
D) A housing loan.

Question 5

A linked credit provider may be liable for any loss or damage cause by defective goods or services provided by the supplier.

Question 6

The National Credit Code applies to all consumer credit contracts regardless of the amount or rate of interest.

Question 7

Which of the following is the best definition of a 'related mortgage'?

A) A credit contract whereby the borrower gives the credit provider rights to assets owned by the borrower to secure repayment under a credit contract.
B) A credit contract in which the credit provider is the borrower's employer and the loan is tied to the borrower's continued employment.
C) A credit contract entered into to pay for goods or services provided by a supplier who referred the borrower to the credit provider.
D) A credit contract in which multiple advances of credit are contemplated and the amount of available credit increases as the debt is reduced.

Question 8

Which of the following is NOT a remedy that is available to a borrower under the hardship provisions of the National Credit Code?

A) Postpone repayment for a specified period.
B) Extend the period of the contract.
C) Reduce the amount of the repayments.
D) Set aside or cancel the credit contract.

Question 9

A credit card is an example of a continuing credit contract.

Question 10

If mortgaged goods are sold by a credit provider under the National Credit Code the borrower is fully discharged from any amount outstanding.

Question 11

Which of the following security can NOT be registered under the Personal Property Security Act 2009 (Cth)?

A) A home loan mortgage.
B) A floating charge.
C) A hire purchase agreement.
D) A chattel mortgage.

Question 12

To be valid, a mortgage must be in writing, signed by the mortgagor and clearly identify the mortgaged property.

Question 13

Which of the following transactions will be covered by the National Credit Code?

A) Angela pawns her ring with a pawnbroker.
B) Bryce borrows $5,000 from his uncle.
C) A strata corporation borrows $25,000 to repaint the building.
D) Colin receives an advance on his wages from his employer.

Question 14

A borrower can terminate a credit contract at any time before the credit is provided.

Question 15

In relation to consumer credit contracts, the National Credit Code provides for:

A) Rights and obligations of the parties.
B) Full disclosure of the true cost of the credit provided.
C) Relief for hardship and reopening of unjust transactions.
D) All of the above.

Question 16

A person who promises to pay the full amount of the debt if the borrower defaults is called a:

A) Related borrower.
B) Linked borrower.
C) Judgment debtor.
D) Guarantor.

Question 17

Who may apply for a civil penalty for a breach of the National Credit Code?

A) A government agency.
B) The borrower.
C) The credit provider.
D) All of the above.

Question 18

When will the National Credit Code NOT apply to a short term loan?

A) Where the term is less than 62 days, the credit charges are less than 5% of the amount of the loan and less than 24% per annum.
B) The National Credit Code always applies to short term loans.
C) When it is a 'pay day' loan.
D) Where the term is less than 62 days and the credit charge is fixed regardless of the amount borrowed.

Question 19

Which of the following is the best definition of a 'continuing credit contract'?

A) A credit contract entered into to pay for goods or services provided by a supplier who referred the borrower to the credit provider.
B) A credit contract in which multiple advances of credit are contemplated and the amount of available credit increases as the debt is reduced.
C) A credit contract whereby the borrower gives the credit provider rights to assets owned by the borrower to secure repayment under a credit contract.
D) A credit contract in which the credit provider is the borrower's employer and the loan is tied to the borrower's continued employment.

Question 20

Which of the following is NOT one of the pre-contractual requirements for a binding credit agreement?

A) The credit contract must clearly state the purpose for which the credit is provided.
B) The credit provider must give the borrower a statement of financial details.
C) The borrower must be given a statement of their rights and obligations.
D) The credit contract must be in writing, signed by the borrower and the credit provider.

Question 21

When a borrower makes an application for credit by filling in a form online, this is known as a 'low-doc loan.'

Question 22

Which of the following statements about hire purchase is NOT correct?

A) The hirer can terminate the agreement by returning the goods to the owner before the stipulated period of hire has expired, without further liability.
B) Hire purchase agreements are regulated by the National Credit Code and the Sale of Goods Acts of each state.
C) A hire purchase agreement is a contract whereby the owner agrees to hire out certain goods coupled with an option for the hirer to purchase the goods.
D) The hirer can terminate the agreement by paying the full amount of the hire and becoming the owner of the goods.

Question 23

If a finance company is a party to a hire purchase agreement they will be:

A) The dealer of the goods.
B) The financier of the goods.
C) The owner of the goods.
D) All of the above.

Question 24

Which of the following factors will a court consider in determining whether a credit contract is unjust?

A) The terms of other comparable transactions involving other credit providers.
B) The relative bargaining power of the parties.
C) Whether independent legal advice was obtained.
D) All of the above.

Question 25

The Credit Reporting Code permits a credit provider to collect both positive and negative information about a borrower's consumer credit history.

Question 26

In the context of credit information, which of the following statements about the Privacy Act 1988 (Cth) is NOT correct?

A) The Act is supported by a Credit Reporting Code which is a mandatory industry code.
B) The Australian Information Commissioner deals with complaints by individuals about credit providers and credit reporting agencies.
C) The aim of the Act is to restrict credit information to credit applications and other credit-related activities.
D) The Act prohibits credit providers from accessing information about a borrower's previous history of consumer credit payments.

Question 27

Which of the following statements about the Privacy Act is NOT correct?

A) The Act does not apply to the journalism activities of media organisations.
B) The Act provides for a general right for consumers to access their own health records.
C) The Act applies to employee records held by employers.
D) All entities regulated by the Act are required to have a privacy policy.

Question 28

In what circumstances will the Australian Securities and Investments Commission (ASIC) have jurisdiction over a credit contract?

A) If the provision of a financial service involves misleading and deceptive or unconscionable conduct under the terms of the Australian Securities and Investments Commission Act 2001 (Cth.).
B) Whenever credit is provided by a company incorporated under the Corporations Act 2001 (Cth.).
C) ASIC has no jurisdiction over the provision of credit.
D) If there is a breach of the disclosure and licensing requirements of the Corporations Act 2001 (Cth.).

Question 29

Which of the following businesses will be covered by the Privacy Act 1988 (Cth)?

A) Any business with an annual turnover of $3 million.
B) Any business which discloses personal information for a benefit or provides a benefit to someone else to collect personal information.
C) Any health service provider.
D) All of the above.

Question 30

Which of the following information is NOT collected as part of the borrower's Repayment History Information?

A) The dates on which payments are due and payable.
B) The amount of any missed payments.
C) Whether an individual has previously met their obligations when due and payable.
D) The date of any late payments.

Question 31

The National Credit Code will treat a hire purchase agreement as a sale by instalments if the charge for hiring the goods exceeds the price of the goods.

Question 32

If a borrower has previously settled a dispute with a credit provider they cannot later apply to the court to reopen the transaction for unconscionability.

Question 33

A hire purchase agreement is a contract that involves a minimum of three parties.

Question 34

The Australian Privacy Principles prohibit the use of pseudonyms by individuals.

Question 35

Which of the following is NOT one of the characteristics of a modern hire purchase agreement?

A) Goods are hired at a periodic rental which includes interest charges equal to the total price payable.
B) Property in the goods does not pass until the final instalment of hiring is made.
C) A hire purchase agreement is considered to be an agreement to sell under the Sale of Goods Acts.
D) The owner has the right to repossess the goods if there is a breach of the agreement to hire.