Press reports yesterday (The Australian, 22/1/18) have stated that ASIC is about to embark on a programme of "secret shopping" of banks and mortgage brokers to investigate responsible lending practices.
Typically, this work is conducted through third-party agencies who, in turn, contract real consumers looking for the product in question - mortgages in this case - to carry out the research and report back on their experiences.
QED Risk Services believes that the majority of our industry should have no problem with this activity. Licenced persons (both ACL holders and Credit Representatives) have always had key activities to undertake to ensure they meet their responsible lending obligations on every occasion.
A quick NCCP compliance check list includes:
- Provide a consumer with a Credit Guide & Privacy Statement before undertaking credit activities.
- Accurately record client interviews on every occasion, ensuring their requirements and objectives are captured. Generic comments such as "refi" or "for future investment" are not good enough.
- Document a preliminary assessment and present this to the client demonstrating how the selected products meet the stated requirements and objectives.
- Once a lender and product are selected, ensure a Credit Proposal Disclosure Document is completed in a timely fashion
In particular, in a September 2016 Report, ASIC offered the following observation:
The best files we observed included a logically set out and detailed narrative account of the consumers' short and longer term requirements and objectives, which drew together the consumers' responses to various questions. These accounts also described in detail the reasoning behind selecting a loan with particular features, terms and costs from a particular lender.
Broking businesses that have questions or concerns about their obligations and NCCP compliance testing, should not hesitate to call QED on 1300 817 662 or, even better still, demonstrate their compliance by subscribing to QED CompliFast without delay.
To find out more from The Australian, go to if you are a subscriber