A credit representative is a person authorised to engage in specified credit activities on behalf of an Australian credit licensee or registered person under the National Consumer Credit Protection Act 2009 (National Credit Act).
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.
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.
The Australian Securities and Investments Commission (ASIC) has 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.
While ASIC consider 20 hours of CPD per year to be appropriate, no minimum level is mandated.
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.
Dispute resolution requirements
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.
From 1 November 2018, the Australian Financial Complaints Authority (AFCA) will be the only ASIC-approved dispute resolution scheme for consumers and small businesses.
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 licensee that you select.
Things that you should consider include:
- extent of authorisation
- level of independence
- level of ongoing support and services offered
- training requirements and resource provision.