04/09/2019 - 10:18

ASIC takes BoQ and Bendigo to court

04/09/2019 - 10:18

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The Australian Securities and Investments Commission is launching legal action against the Bendigo and Adelaide Bank and Bank of Queensland amid allegations of unfair small business lending terms.

ASIC takes BoQ and Bendigo to court
ASIC has launched legal action against Bank of Queensland.

The Australian Securities and Investments Commission is launching legal action against the Bendigo and Adelaide Bank and Bank of Queensland amid allegations of unfair small business lending terms. 

The corporate regulator said it had commenced seperate Federal Court proceedings against Bendigo and BoQ, over certain small business contracts entered into between November 2016 and June this year. 

It alleges there were unfair clauses in the contracts that gave the banks, but not borrowers, broad discretion to vary terms and conditions without the consent of the small business owner. 

Other clauses allowed the banks to call a default, even if the small business owner has met all of its financial obligations.

ASIC also said the clause were not reasonably necessary to protect the banks’ legitimate interests

If the court agrees with ASIC's claims, the specific terms in the contract will be void and unenforceable by the banks.

The regulator said that since July 2010, it has administered the law to deal with unfair terms in standard form consumer contracts for financial products and services, including loans.

With effect from November 2016, the unfair contract terms provisions applying to consumers under the Australian Consumer Law and the ASIC Act were extended to cover standard form ‘small business’ contracts.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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