Consumer credit finance brokers

The Consumer Credit Administration Act 1995 regulates all finance broking intermediaries who negotiate with credit providers to obtain consumer credit for clients.

Requirement for a written contract

The Act requires the finance brokers to enter into a written contract with a consumer before commencing finance broking. The contract must contain full details of the credit required by the consumer. 

Disclosure requirements

The contract must contain details, in terms prescribed by the Regulation, of commissions or other benefits that may be received by the finance broker, and of the fact that the broker’s recommendations will be drawn from a limited range of lenders.

When commission can be charged

The Act prohibits the finance broker from claiming commission in advance of securing the credit for the client, or if the credit secured does not match the terms set out in the contract.

Exemptions

Finance brokers who are intermediaries for the purposes of the Act, and have entered into certain exclusive or other arrangements with credit providers to provide credit that is advertised, promoted or offered under a single brand, trademark or business name, are exempt from the legislation.