Becoming a Credit Representative

Monday, 13 September 2010 12:14
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What does this option mean?

A credit representative is a person authorised to engage in specified credit activities on behalf of a credit licensee or registered person under the National Consumer Credit Protection Act 2009 (National Credit Act). In other words, rather than applying for your own Australian credit licence, you can be authorised as a credit representative under someone else’s licence.

The credit licensee will be ultimately responsible for the advice given and therefore they must ensure that their credit representatives meet minimum compliance and training requirements.

What are the training requirements?

Credit representatives must be adequately trained and competent to engage in the credit activities authorised by their licence. 

There are different requirements for credit representatives and those providing mortgage broking services.

Credit representatives

ASIC have not set minimum training standards for credit representatives. It is up to the credit licensee to determine what initial and ongoing training is appropriate to ensure compliance.

If industry training standards currently exist for specific sectors of the credit industry or for specific products, ASIC expect that representatives will be trained to at least this level. As a general guide it is recommended that credit representatives obtain at least Certificate IV level qualification in a relevant field.

While ASIC consider 20 hours of CPD per year to be appropriate, no minimum level is mandated. 

Mortgage brokers

Representatives who provide mortgage broking services must met minimum training requirements as set out by ASIC, which are:

  • at least a Certificate IV in Financial Services (Finance / Mortgage Broking)
  • 20 hours of CPD per year

Transitional arrangements

Credit representatives who provide mortgage broking services have until 30 June 2014 to obtain a Certificate IV in Financial Services (Finance / Mortgage Broking).

Dispute resolution requirements

From 1 July credit representatives must be a separate member of an ASIC-approved external dispute resolution (EDR) scheme, in addition to the membership of the registered person or credit licensee that you represent.

You will not need to be a separate member if you have been sub-authorised under s65(1) of the National Credit Act and you are an employee or director of the body corporate that gave you the sub-authorisation.

If you are not a member of an ASIC-approved EDR scheme, any authorisation made by a credit licensee will not take effect and it may be considered an offence under the National Credit Act.

There are currently two approved EDR schemes. 

Financial Ombudsman Service Ltd
Ph: 1300 780 808 or  03 9613 7366
Application fee $200
Yearly membership fee (2010-11) $275 – $11,000 based on size of business*
Dispute charges based on dispute
* Most small business will pay the base levy of $275 p.a.
Credit Ombudsman Service Ltd
Ph: 1800 138 422 or 02 9273 8400
Application fee $165
Base membership (includes one working director or employee business writer) $250 p.a.
Additional representatives $75 each
Additional fees for Mortgage Management, Managed Investments, Leasing, Debt Collection & Debt Servicing
Additional fees for Securitisers, Lenders, Funders, Debt Buyers & other credit providers.

You do not need to provide your own internal dispute resolution (IDR) procedures.

Selecting a credit licensee

As a credit representative, you must feel confident and comfortable with the credit licence holder that you select.

Things that you should consider include:

  • extent of authorisation
  • level of independence
  • reputation
  • level of ongoing support and services offered
  • training requirements and resource provision

Key ASIC reference: Regulatory Guide 206: Credit licensing: Competence and training

Last Updated on Tuesday, 17 December 2013 10:11

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