In a statement released on Friday, ASIC confirmed that the unfair terms were found in standard form loan contracts between BOQ and its small-business customers after 12 November 2016.
The court found that the terms included “unilateral variation clauses” that allowed BOQ to vary the terms and conditions of their contracts without giving borrowers advance notice or an opportunity to exit the contract without penalty, “event of default clauses” that allowed BOQ to unilaterally determine whether a default has occurred, “indemnification clauses" that allowed BOQ to make a claim against a customer for losses caused by BOQ’s mistake, error or negligence and “conclusive evidence clauses” that meant that if BOQ issued a certificate stating an amount owing by a customer, that amount would be assumed to be correct unless the customer could prove otherwise.
“Small business owners deserve to be able to enter into fair loan contracts, especially where they have little or no ability to negotiate the terms,” ASIC commissioner Sean Hughes said.
“ASIC will take action against unfair practices in standard form contracts, whether it be for consumers or the small business community.”
The court has ordered that the terms be replaced with “new, fair terms agreed by all parties”.
“The declarations sought are appropriate because they serve to record the Court’s disapproval of the contravening conduct, vindicate the claim by ASIC that the bank had contravened the Act, assist ASIC to carry out the duties conferred upon it by the Act, and deter other corporations from entering into contracts containing unfair terms,” Justice Banks-Smith said.
Neil Griffiths
Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.
Neil is also the host of the ifa show podcast.
