Your ongoing credit licence obligations
As a credit licensee, you must comply with the general conduct obligations, which aim to ensure that you operate your credit business properly.
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 an external dispute resolution scheme)
- 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.
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 order relief or individual relief for some obligations.
You will be required to lodge an annual compliance certificate (ACC) with us, in which you must certify whether you have complied with your obligations as a licensee. You will be charged an annual fee when you lodge your ACC.