Who is regulated?

Contributed by Elizabeth Samra, Consumer Law Centre of the ACT and current to May 2018

From 1 July 2010 any person engaging in a “credit activity” will need to have an Australian Credit License (“ACL”), unless they are exempt (see r 20-25 of the NCCP Regs) or authorised to engage in those activities as a representative of a credit licensee (s 29(3) NCCP Act).

Credit activity is defined in s 6 of the NCCP Act and includes:

• the provision of credit under a consumer contract or consumer lease;
• benefitting from a mortgage or guarantee relating to a credit contract or consumer lease;
• providing a credit service in relation to a credit contract or consumer lease.

This means that most credit providers, finance brokers (known as credit assistance providers) and consumer lease providers and their intermediaries must hold an ACL. A search can be made on ASIC’s online registers for ACL holders or registered credit representatives.

Credit licensees have general conduct obligations they must follow which are set out at s 47 of the NCCP Act. Among these are that licensees: must have do all things necessary to ensure that the credit activities are engaged in efficiently, honestly and fairly; have an internal dispute resolution procedure that complies with ASIC made or approved standards; and be a member of the AFCA scheme. See also ASIC Regulatory Guide 205 Credit Licensing: General Conduct Obligations .

These general conduct obligations are not penalty provisions and consumers have no statutory remedies available for breaches. However, contravention of these obligations can give rise to ASIC suspensions or cancellations of licenses (s 55(1)(a) NCCP Act).