The Law Handbook 2024

426 Section 5: Managing your money • suggesting that the consumer apply for a particular consumer lease with a particular lessor; • suggesting that the consumer remain in a particular consumer lease with a particular lessor; or • assisting the consumer to apply for a particular consumer lease with a particular lessor. The definition captures finance broking services. However, under the NCCP Regulations (reg 24), certain activities that fall within this definition are exempted, including in certain circumstances, credit activities provided by lawyers, tax agents and clerks or cashiers. Intermediaries Historically, consumer credit protection laws have not been effective at regulating the conduct of intermediaries (e.g. finance brokers, aggregators, mortgage managers) in multi-party credit arrange­ ments. To address this, a broad definition of the phrase ‘acts as an intermediary’ has been included in the NCCP Act so that a broader range of actions require the actor to hold an Australian Credit Licence and be subject to regulation under the new regime. Under the NCCP Act, a person acts as an intermediary if the person: • acts as an intermediary (whether directly or indi- rectly) between a credit provider and a consumer for the purposes of securing the provision of credit for the consumer with that credit provider under a credit contract; or • acts as an intermediary (whether directly or indirectly) between a lessor and a consumer for the purposes of securing a consumer lease for the consumer with that lessor. At first glance the section is clumsily drafted but brands involvement, by a third party, in securing a particular product for a consumer with credit provider or lessor, as acting as an intermediary. It does not matter whether the person acts on their own behalf or on behalf of another person (s 9 NCCP Act). Obligations of licence holders Australian credit licences fall into different categories, depending upon the credit activity or activities they are engaged in. However, there are some obligations imposed on all licencees. These include: • doing all things necessary to ensure that the credit activities authorised by the licence are engaged in efficiently, honestly and fairly (s 47(1)(a) NCCP Act); • complying with the conditions on the licence, the credit legislation and any other obligations prescribed by the NCCP Regulations (s 47(1)(c)– (d), (m) NCCP Act); • ensuring that its representatives are adequately trained, and are competent to engage in the credit activities authorised by the licence (s 47(1)(g) NCCP Act); • having an internal dispute resolution procedure that complies with ASIC standards (s 47(1)(h) NCCP Act); and • being a member of AFCA (s 47(1)(i) NCCP Act). Additionally, licencees must have professional indemnity insurance cover that is adequate to compensate consumers for loss or damage suffered because of a contravention of the NCCP Act (ss 47(1)(j), 48; reg 12 NCCP Regulations). Before you enter a credit contract Responsible lending obligations: Suitability Credit providers, credit assistance providers and lease providers are obliged to assess the suitability of a credit product before providing it to a consumer (ch 3 NCCP Act). Separate provisions of the NCCP Act apply in relation to: • credit assistance providers; • lease providers; • short-term and small amount credit contracts (pt 3-2C NCCP Act); • reverse mortgages (pt 3-2D NCCP Act). In 2021, an exemption to responsible lending obligations was enacted in relation to certain lending activity to small business customers. Instead of considering whether the borrower is accessing credit or goods for a wholly or predominately personal, domestic or household purpose, where there is any business (notwithstanding that some of the credit will likely be applied to household finances), licensees are exempted from the responsible lending laws