Your ongoing obligations as a credit licensee
As a credit licensee, you must comply with the general conduct obligations, which aim to ensure that you operate your credit business properly.
General conduct obligations
You have general conduct obligations that include:
- acting efficiently honestly and fairly
- being competent to engage in credit activities, and ensuring your representatives are competent and
- being able to ensure your clients are not disadvantaged by an conflicts of interest that you or your representatives may have in relation to your credit activities
- ensuring you and your representatives comply with the credit legislation
- having appropriate dispute resolution systems (including both internal systems and being a member of the Australian Financial Complaints Authority (AFCA))
- having appropriate compensation arrangements in place (which for some will include holding professional indemnity insurance)
- having adequate resources (including financial, technological and human resources) and risk management systems
- having appropriate arrangements and systems to ensure compliance.
Credit legislation obligations
The credit legislation also contains more specific obligations and requirements, including:
- the responsible lending requirements (ascertaining and verify a consumer’s financial situation and assessing whether the credit contract is not unsuitable)
- requirements in the National Credit Code dealing with precontractual disclosure and conduct in relation to the terms of credit contracts and consumer leases
- maintaining trust accounts (if you hold money on behalf of another person while providing a credit service).
This is not an exhaustive list of your obligations. You must comply with the conditions of your licence as well as the relevant legislation
Depending on your circumstances, you may be eligible for class relief or individual relief from some obligations.
You will be required to lodge an annual compliance certificate with us, in which you must certify whether you have complied with your obligations as a licensee.
Further guidance
Information Sheet 110 Lenders with carried over instruments (INFO 110)
Information Sheet 126 Credit representatives (INFO 126)
Information Sheet 134 Complying with your obligations if both credit licensee and AFS licensee (INFO 134)
Information Sheet 135 Annual compliance certificates for credit licensees (INFO 135)
Information Sheet 138 Credit annual compliance certificate: Statement of personal information template (INFO 138).