Melbourne's Consumer Action Law Centre has, for the second time in a year, raised questions about the legal obligations of parties involved in the use of linked credit arrangements.CALC issued a media release yesterday urging consumers who took out loans to pay for courses at a Melbourne college that went out of business to apply to the Financial Ombudsman Service to have their loans declared void.When the College of Creative Arts and Technology in Melbourne closed in 2009 it left a number of students unable to finish their courses but still owing National Australia Bank money they had borrowed to pay their course fees.CALC is keen to have the Financial Ombudsman Service determine whether the loans were ones to which linked credit laws apply.CALC's co-chief executive, Catriona Lowe, said in a statement: "If the college had an arrangement with NAB or any other bank to refer students to it for loans, there may have been tied credit contracts which should have been void when the college stopped trading."Many consumers take out loans and think they're committed to the repayments even if they never receive the product or service they were buying. But if the contract between the customer and the service provider is terminated and the credit is a tied credit contract, it is possible the credit contract can also be terminated."A spokesman for NAB said: "We are aware of the closure of the college and we are in discussions with CALC."Last year, CALC acted for a borrower, Shannon Squires, who enrolled in an IT college and was referred by the college to National Australia Bank for a A$20,000 student loan. The operator of the college went into administration and Squires was unable to complete his course. NAB continued to demand repayments. CALC's claim, as is the case in the current situation, was that when NAB approved the loan it established a "tied credit" contract.At the time, an NAB representative said the bank had provided loans to some of the college's students but it did not consider the loans to be either tied or linked credit.CALC took Squires' case to the Financial Ombudsman Service. A settlement was reached but the terms remain confidential.