Very broadly speaking, current legislation relating to responsible lending says that a person must not recommend or make an 'unsuitable' loan to a consumer – an unsuitable loan being one that either does not meet the consumer's requirements and objectives, or imposes repayment obligations that they are unable to meet without substantial hardship.
from Allens Banking & Finance publications http://www.allens.com.au/pubs/fsr/1811-unravelled-02.htm
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