Activities not requiring a credit licence

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The following lists provide a snapshot of the activities that you can and cannot provide to a consumer without holding an Australian credit licence or being licensed as a credit representative. They have been broken down into common areas of advice and examples are also provided where the discussion of credit may impact on financial planning activities.

Financing residential property

  •  You can: 
    • Suggest to a consumer that they consider borrowing in order to finance residential property provided you do not refer to a particular lender or a specific credit product
    • Suggest the consumer approach a range of lenders, all carrying a wide range of credit products provided you do not suggest a specific credit product offered by those lenders
  • You need a credit licence to: 
    • suggest the consumer approach a particular finance company or bank about a specific product – even if you do not arrange or help with setting up the credit contract
    • suggest the consumer approach a particular credit provider who offers a very limited range of credit products, as this may be deemed to be credit assistance given the limited choice of products available with that provider

Debt management 

  • You can:
    • Suggest the consumer pay off their loan with the highest interest rate first, even if it is for a specific loan 
    • Suggest a consumer approach their lender to discuss renegotiating a loan on the basis of hardship 
    • Suggest or advise the consumer to pay off their loan or credit card faster by making extra repayments, even if it is for a specific loan or credit card
    • Suggest the consumer review their multiple credit cards and consider cancelling them all and then finding the cheapest card suitable to meet the consumer’s needs
  • You need a credit licence to: 
    • Suggest a consumer consolidate their credit cards to a specific credit card

Mortgage advice

  • You can:
    • Suggest to the consumer that their home loan may not be the best product available for them at that time and suggest they look at other mortgage products and if necessary, contact a mortgage broker 
    • Provide information about market interest rates and desirable features of a home loan provided it does not relate to specific products in the market 
    • Advise the consumer that their home loan seems reasonable or unreasonable compared to other products on the market 
    • Advise a client that some mortgage providers offer loans with a free redraw facility and explain how this facility works without recommending a particular provider or product
  • You need a credit licence to: 
    • Suggest the consumer that their home loan may not be the best product available and suggest they approach a particular credit provider who offers a very limited range of credit products, as this may be deemed to be credit assistance given the limited choice of products available with that provider

Financial planning advice

  • You can:
    • Provide information explaining that different arrangements can carry different features to a consumer who wants advice about salary packaging where their employer has a default arrangement with a particular credit provider and wants to know if they should use this or another arrangement – you must then refer the consumer to a licensed broker for further advice
    • Prepare a financial plan assuming the continuation of the existing home loan
  • You need a credit licence to: 
    • Explain and draw comparisons between a default arrangement that an employer has with a particular credit provider and another arrangement to a consumer who is seeking salary packaging advice
 

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