Consumer Protection Minister Sheila McHale has launched a new code of conduct for Western Australian finance brokers, to come into effect on June 29.
Consumer Protection Minister Sheila McHale has launched a new code of conduct for Western Australian finance brokers, to come into effect on June 29.
The Minister said the new code meant brokers must:
- Disclose much more information to borrowers before negotiating or arranging any loan, including the range of lenders the broker used and details of any fees or commissions received;
- Make reasonable inquiries about the needs and financial circumstances of borrowers;
- Genuinely believe any loan they arrange was appropriate for the borrower;
- Disclose any conflict of interest; and
- Not refinance loans solely for the purpose of earning fees or commissions.
Brokers who flouted the new code faced a fine of up to $10,000 and cancellation or suspension of their brokers licences.
The full text of an announcement from the Minister's office is pasted below
Western Australians will now be better protected when they get a loan through one of the State's 2,300 licensed finance brokers.
Consumer Protection Minister Sheila McHale said the new Finance Brokers' Code of Conduct made WA a leader in protecting people who used licensed brokers.
"WA is already the only Australian State that licenses finance brokers - now these reforms go even further," Ms McHale said.
"Consumers have a right to expect finance brokers will operate ethically and professionally - and that stiff penalties will apply if they do not."
The Minister said the new code meant brokers must:
- Disclose much more information to borrowers before negotiating or arranging any loan, including the range of lenders the broker used and details of any fees or commissions received;
- Make reasonable inquiries about the needs and financial circumstances of borrowers;
- Genuinely believe any loan they arrange was appropriate for the borrower;
- Disclose any conflict of interest; and
- Not refinance loans solely for the purpose of earning fees or commissions.
Ms McHale said brokers who flouted the new code faced a fine of up to $10,000 and cancellation or suspension of the brokers' licences.
"If brokers breach the code and are likely to cause significant loss to others if they continue, the brokers' licences can be suspended for up to 60 days before the matter goes to the State Administrative Tribunal," she said.
The new code, which was developed with public and industry consultation, comes into force on June 29.
From now until then, education will take place within the industry.
