Car finance provider, Capital Finance Australia Limited (Capital Finance), a subsidiary of Westpac Banking Corporation, has paid penalties totalling $493,000 after ASIC found it breached important consumer protection provisions in the National Consumer Credit Protection Act (National Credit Act) relating to the repossession of motor vehicles.

When consumers fail to meet their repayment obligations (or 'default') on a loan, the National Credit Act requires lenders to send written default notices containing specific information about what the lender is proposing to do, how long the consumer has to remedy the default, and what the consumer's rights and obligations are.

ASIC found that between March 2015 and June 2015, Capital Finance:

Failed on 55 occasions to provide customers with default notices prior to commencing enforcement proceedings to repossess mortgaged vehicles; and on three occasions, did not provide customers with legally required information setting out their rights and the options available to them within the required time frame after it repossessed mortgaged vehicles.

As a result, consumers were not given information about their legal rights and protections when they were in danger of having their cars repossessed. For example, consumers were not advised that they had 30 days to remedy a default before Capital Finance could commence enforcement proceedings. Consumers were also not advised that they could give notice of their financial hardship to Capital Finance and seek a variation to the repayments.

ASIC Deputy Chairman Peter Kell said, 'It is crucial that credit providers engage responsibly with consumers who are having difficulty in making their repayments and who may be experiencing financial hardship. Having a car repossessed can have a significant impact on a consumer, and car financiers must ensure that key information  is provided to consumers. ASIC will act against licensees who fail to meet these obligations'.

Capital Finance has already commenced contacting affected consumers. However, any other consumers who think they may be affected by the above conduct should contact Capital Finance at 1300 300 309.


Capital Finance, holder of an Australian credit licence, provides motor vehicle finance to consumers. Following investigations into Capital Finance's collection practices, ASIC issued 58 infringement notices in March 2016 totalling $493,000 for breaches of provisions relating to enforcement proceedings available to credit providers.

The matter came to the attention of ASIC as a result of Capital Finance voluntarily reporting the breaches to ASIC. The breaches arose as a result of breakdowns in processes designed to ensure compliance with the law.

Capital Finance has implemented new processes to ensure compliance with these provisions and has voluntarily implemented a remediation plan for affected customers.

The payment of an infringement notice is not an admission of guilt in respect of the alleged offence. ASIC can issue an infringement notice where it has reasonable grounds to believe a person has committed an offence of strict liability against the National Credit Act.