This week’s TGIF considers the case of Australian Securities and Investments Commission v Australia and New Zealand Banking Group Limited [2018] FCA 155 which concerned contraventions of consumer credit legislation as result of verifying income on payslips alone.

What happened?

On 28 February 2018, the Federal Court of Australia handed down its decision in Australian Securities and Investments Commission v Australia and New Zealand Banking Group Limited [2018] FCA 155.

The decision concerned a bank’s entry into consumer credit contracts in respect of 12 car loan applications from three brokers. The bank conducted income verification on the basis of the consumer’s payslip. The payslip had been provided to the bank by a third party intermediary.

The bank accepted that it had failed to take reasonable steps and cooperated with ASIC. ASIC and the bank made joint submissions to the Court.

In considering the appropriate pecuniary penalty, Middleton J found:

  1. income is one of the most important parts of the consumer’s financial situation as it governs the consumer’s ability to repay its loan;
  2. payslips are a type of document that are easily falsified;
  3. in this instance, the payslips were received from a third party intermediary, in circumstances where there was knowledge that they were potentially unreliable.

This constituted a contravention of the obligation to take reasonable steps to verify the consumer’s financial situation before entering into a consumer credit contract.


This case highlights that ‘reasonable steps’ under the Consumer Credit Protection Act require more than simply looking over a single document. Rather, credit licensees must conduct a deeper analysis and consider the context in which a document is produced. If circumstances arise where a credit licensee is given reason to doubt the reliability of a source of information, it must make further inquiries or risk facing very substantial civil penalties.

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