ABA: Banking sector needs new start date for proposed unfair contract terms
The Australian Bankers' Association (ABA) said the banking industry will not have enough time to review and, where necessary, amend their consumer standard form contracts and security instruments to be ready for the start of the proposed unfair contract terms regime in January next year.
ABA Chief Executive, David Bell, told the Senate Economics Committee the banking industry needed more time to transition and the definition of 'unfair' was also causing concern in the banking industry.
Mr Bell said: "It should be made clear in the existing definition that a term will be 'unfair' only if it causes material detriment to consumers in accordance with the Productivity Commission's recommended approach."
"The definition of this term and others in the legislation is vague and needs to be clarified before this regime is introduced. We have a living example in Victoria where uncertainty created by the lack of clarity in its unfair contracts law has created disruption and costs for business," he said.
"Business resources have been drained during investigations by regulators of standard form contracts to which vague and uncertain criteria are applied to assert the terms are unfair," Mr Bell said.
27 August, 2009