Guarantees: Know Your Rights

When entering into a guarantee with [Financial Institution], it’s essential to be aware of the terms and conditions that protect your financial interests. This article will explore the key aspects of guarantees, how they can impact your liability, and what you need to know.

Limiting Liability

A guarantee is limited to a specific amount plus other liabilities described in the Guarantee, or the value of a specified security at the time of recovery. This means that you will only be responsible for paying up to a certain amount, depending on the terms of the guarantee.

Notices and Disclosure

Before taking out a guarantee with [Financial Institution], they are required to provide you with important notices and disclosures. These include:

• The right to seek independent legal and financial advice
• The fact that there are financial risks involved
• Your right to limit your liability in accordance with the code and as allowed by law
• Information about the transaction or facility being guaranteed

Extinguishing Liability

You have the right to extinguish your liability under a guarantee at any time by:

• Paying the outstanding amount owed by the debtor
• Making other arrangements satisfactory to [Financial Institution]

Withdrawing from the Guarantee

You can withdraw from the guarantee at any time before credit is first provided under the relevant credit contract. After credit has been provided, you can only withdraw if the credit contract differs significantly from the proposed credit contract given to you before signing the guarantee.

Enforcing Judgments

[Financial Institution] will not enforce a judgment against you unless certain conditions are met, including:

• Obtaining a judgment against the principal debtor for payment of the guaranteed liability
• Making reasonable attempts to locate the debtor without success
• The debtor being insolvent
• A court or tribunal ordering [Financial Institution] to proceed first against you

PINs and Passwords

In relation to PIN numbers and passwords issued by [Financial Institution], it’s essential to follow best practices for security, including:

• Not issuing PINs or passwords that are easily guessable
• Informing customers of unsuitable PINs and passwords, such as birth dates or sequential numbers
• Educating customers on how to safeguard their PINs and passwords, including memorizing them and not recording them anywhere

By understanding the terms and conditions of a guarantee and following best practices for security, you can protect your financial interests and ensure that you are aware of your rights and obligations.