If you stop making your loan repayments, the lender will most likely start enforcement proceedings against you. This means they may take legal action in a court of law to claim back the money you owe them. They could ask the court to put a charge over your property which they can enforce if you fall behind with future payments or sell some of your assets to recover any money that you still owe them. If this happens, the court decides who gets paid – either the lender or another creditor who has a charge over your property.
Every state and territory have its own rules about what would happen if a lender starts enforcing their rights against a borrower who fails to make repayments on their personal loans from cash converters. These rules are usually contained in regulations or legislation.
The jurisdiction where you live or the location of your property is what will determine the process a lender needs to follow to start enforcing their rights against you if you stop making your loan repayments.
In New South Wales, the Personal Property Securities Act 2009 (Cth) placed a new framework around how personal loans are enforced by lenders and other creditors hoping to recover money from borrowers who do not make their repayments on time. This made it easier for lenders to enforce their rights against borrowers in court after a default has been registered on a credit report under section 143 of the National Consumer Credit Protection Act 2009 (Cth). A default occurs once an account has been more than 60 days overdue. This new system came into effect on 1 December 2012 and payday lenders had to comply with these new rules by 1 July 2014.
Where can I find information about the company?
The lender must provide you with their registered business name and Australian Business Number (ABN). They also have to tell you who they are acting for, so make sure it is clear whether this is for them as an individual or on behalf of a company. If they say on behalf of another company – such as a holding or parent company – they must provide you with details on this too.
The lender must give you the following contact details:
- Phone number (landline) Mobile/prepaid phone number
- Email address
- Website address (and postcode)
At least one means of contacting them outside normal business hours.
If a lender does not tell you this information, or if the details are incorrect, they have broken the law and you may be able to recover your debt without having to pay any fees. If a lender starts enforcing their rights against you after 1 December 2012 for a credit contract entered into on or after that date, they must also provide more detailed information about themselves before starting enforcement proceedings.
This includes:
Details of anyone who is authorised to act on their behalf (like an agent) including full name State their Australian Business Number (ABN) Details of where they conduct business – either at the place of their principal office or at another location Things like ABNs can be searched online through ASIC.
