480,825 Old Finance Claims Came Off the Register. Is Yours Still There?

Australia's public record of finance claims over cars, equipment and other movable property shed 480,825 registrations in the June quarter, the third highest quarterly clean-out on record. The Australian Financial Security Authority, which runs the register, said a significant number of them were simply out of date.

The Personal Property Securities Register is the noticeboard for who holds a financial claim over an asset that is not land. It is what a used car buyer checks before handing over money, and what a lender checks before approving finance against a vehicle, trailer or piece of machinery. AFSA chief executive Tim Beresford said it supports more than 10 million active registrations covering an estimated $490 billion of property.

A registration is meant to come off once the debt behind it is repaid, the lease ends, or the obligation is otherwise satisfied. Often it does not. AFSA said outdated registrations "can continue to appear on searches, creating uncertainty for consumers and businesses and potentially delaying access to credit or commercial transactions".

Why a dead registration still costs you

The damage shows up at the worst possible moment, the day you try to sell. A buyer runs a search on your ute, sees a finance company listed against it and walks away. Or your own lender runs the same search while assessing a new application and finds a claim you thought had gone four years ago when you made the final payment.

The claim does not have to be live to cause the problem. It only has to be visible. And because the register works as a public noticeboard rather than a running ledger, it does not clear an entry by itself when the underlying debt is paid. Someone has to do it.

The clean-out was prompted, not automatic

That is the part worth reading closely. AFSA described the result as following "targeted engagement by AFSA with industry participants to encourage compliance with obligations to remove registrations that are no longer required". The regulator went looking for secured parties who had not been discharging, and asked them to. Almost half a million entries came off, following a record 572,294 in the December quarter last year.

So the register is meaningfully cleaner than it was a year ago. But a campaign that works by prompting lenders one at a time is not the same as knowing your asset was caught in it. If you paid out a car loan, finished an equipment lease or bought a second-hand trailer in the past few years, the reliable way to find out is to look.

What to do

Search your own assets before you need to. A search costs $2 online and the search certificate costs nothing on top. For a car, caravan, boat, motorbike or trailer, search by VIN or serial number. For business equipment with no serial number, search your own name or your ABN as the grantor, which returns everything registered against you rather than against one item. Do this now rather than in the week you list the asset, because the fix has a queue.

If something is sitting there that should not be, the removal path starts with you rather than with the regulator. You send the secured party an amendment demand, by email or post, to the address for service shown on your search certificate. It has to carry the registration number, your demand that it be removed, your name and contact details, and the giving of notice identifier if the registration shows one. Then you wait five business days. If the entry survives that, you can apply to AFSA, which costs nothing but which AFSA warns "can take weeks, or even months", or apply to a court, the route the register points to when you need it gone in time for a sale.

If you sit on the other side of this, the audit takes five minutes. Business owners who register claims against their own customers, whether on equipment hire, retention of title terms or vendor finance, should pull the live registrations under their secured party group and end the ones attached to customers who have paid out. Ending a registration is free. Leaving it in place is what stops a former customer refinancing, and it is the behaviour AFSA has said it is now watching.

This article is general information only and is not financial advice.