Credit licences and what counts as credit assistance

Australian consumer credit is a licensed occupation. That is the part of the National Consumer Credit Protection Act 2009 (Cth) that comparison-site copy treats as furniture and that borrowers only notice when something has gone wrong. If you provide credit, or if you provide credit assistance, you generally need an Australian credit licence, or you need to be a representative of someone who has one. “Credit assistance” is not a vibe and it is not a synonym for being helpful. It is a defined activity in section 8 of the Act.

This publication explains the definition because we live on the other side of it. Credit Made Simple does not hold an Australian credit licence. It does not suggest that you apply for a particular contract with a particular provider, assist you to apply, or suggest that you remain in one. The moment a sentence starts to sound like “take this card,” we cut it. That is not coyness. It is the line the statute draws.

The licence

An Australian credit licence is issued by ASIC under Part 2-2 of the Act. It authorises specified credit activities: acting as a credit provider, acting as a lessor, providing credit services, and the associated functions the licence conditions spell out. A bank’s licence does not look like a one-person broker’s licence. The register will tell you the difference if you read the authorisations rather than the logo.

Licensees have general conduct obligations as well as the product-specific ones. They must act efficiently, honestly and fairly; maintain competence; have dispute-resolution arrangements, which in practice means internal dispute resolution and membership of the Australian Financial Complaints Authority; and have compensation arrangements. Those duties are why a licensed broker and an unlicensed Facebook intermediary are not interchangeable, even when both are pleasant on the phone.

Exemptions exist. Some referrals can be exempt if all the person does is point you at a licensee, tell you how to make contact, and disclose any benefit. The exemption is narrow. ASIC’s Regulatory Guide 203 is the long version. A “referral” that includes a suggestion you take a particular loan is not a referral in that thin sense. Point-of-sale intermediaries, vendor introducers and fintech widgets have spent fifteen years testing the edge. The edge is still an edge.

You can look a licensee up. ASIC’s registers are public. A firm that will not give you a licence number is not “boutique.” It is unverifiable.

Credit representatives

A credit representative is a person authorised under section 64 or 65 to engage in specified credit activities on behalf of a licensee. The authorisation is written. The representative can be authorised for some of the licensee’s activities and not others. A representative who is allowed to give credit assistance is not, by that fact, allowed to provide the credit.

The licensee remains responsible for the representative and must supervise them. The representative must have their own AFCA membership before the authorisation is given — a detail that exists because consumers otherwise chase a ghost when the relationship sours. Employees and directors of a licensee are “representatives” in a broader sense; “credit representative” is the appointed, often external, category.

A person can be a licensee for one activity and a representative for another. The combination is lawful when the authorisations do not collide. It is also a reason letterheads are confusing. The name on the email signature may not be the name on the licence. Ask for both numbers.

Training rules sit in Regulatory Guide 206. They are not the subject of this piece, except to say that a representative who cannot explain whether they are authorised to suggest a home loan or only to take an application is not ready to take the application.

What “credit assistance” means

Section 8 is a list, and the list is more precise than the industry’s use of “advice.” A person provides credit assistance if, by dealing directly with the consumer or the consumer’s agent, in the course of a business carried on in Australia, they do any of the following: suggest that the consumer apply for a particular credit contract with a particular credit provider; suggest an increase to the limit of a particular contract; suggest that the consumer remain in a particular contract; assist the consumer to apply for a particular contract or a particular increase; or do the equivalent things for a particular consumer lease with a particular lessor.

Two words do the work. Particular means a specified contract with a specified provider, not “a credit card might be useful” and not “you could speak to a bank.” Suggest and assist are ordinary verbs. Filling the form, steering the click, ranking one loan as the one to take — those are the facts a court or ASIC will look at. It does not matter whether the person does it on their own behalf or for someone else.

What is not on the list is also the point. Explaining how comparison rates are calculated is not assistance. Explaining how a hardship notice works is not assistance. Explaining that responsible lending still applies to some products and not in the old way to others is not assistance. Naming a lender as the one you should apply to this afternoon is.

The business qualifier matters. The Act is aimed at people who do this as part of, or incidentally to, a business. A journalist, a counsellor employed by a free service, or a teacher walking through a sample statement is not, without more, a credit assistant. A lead-generation business that is paid when you click “apply” on a named product is in a different category, which is why many of those businesses are licensed.

Comparison sites, brokers and the other intermediaries

Mortgage brokers are the familiar case. They suggest particular loans from a panel, they assist with the application, and they are paid by commission, a fee, or both. That is credit assistance. It is lawful when they are licensed or authorised, they disclose the relevant conflicts, and they meet the conduct duties that attach to the role — including, for many home-loan brokers, a best-interests duty that is a separate statutory creature from the old responsible-lending worksheet.

Car yards and dealer, bank and broker car finance sit in a messier version of the same structure. The person who “does the paperwork while you wait” may be a representative of a financier, an employee of the dealer group, or both. Ask who holds the licence and who will own the contract. The smile in the finance office is not an authorisation.

Comparison sites range from licensed businesses that exist to push applications, through to publications that accept advertising. The legal question is the same section 8 question: is the site suggesting a particular contract with a particular provider, or assisting you to apply? A sortable table with an apply button is often assistance. A long-form explainer with no application path is not. Some sites try to be both, and hold a licence for the half that needs one. That is coherent. What is not coherent is a site that refuses the licence and keeps the button.

Accountants, real-estate agents and “credit repair” firms wander onto the same line when they move from describing a process to steering a particular application. Repair is a credit-reporting conversation; see credit-repair companies. It becomes credit assistance if the firm starts placing you into a new contract as the supposed solution.

Why this journal stays on the information side

We write about mechanisms: scores, residual interest, hardship clocks, AFCA time limits, the 20-plus-4 SACC cap. We name institutions that exist — ASIC, AFCA, OAIC, Equifax, Experian, illion, the National Debt Helpline. We do not rank a “best” credit card, nominate a lender, or host an application.

That is an editorial standard and a licensing position. The two are aligned on purpose. A journal that took a commission on a particular personal loan would be a credit-assistance business that happened to have a masthead. Readers would then need the protections that attach to licensees: AFCA, compensation arrangements, a best-interests or unsuitability analysis depending on the product. We would rather remain a publication you can sue for a correction than a broker you have to complain about as a licensee.

Free financial counsellors, reached through 1800 007 007, also stay on the information-and-advocacy side. They do not need to sell a contract to finish the appointment. That is why they are the right first call when a website is already trying to finish it for you.

If you want someone to suggest a particular contract, use a person you can find on ASIC’s register, get the disclosures in writing, and assume they are being paid by someone. If you want to understand the contract you already have, read it, read the Code, and use IDR and AFCA when the licensee drops the file. Those are different jobs. The Act is what keeps them from being done by the same unlicensed inbox.

A licence is not a character reference. Licensed people write unsuitable loans, mishandle hardship, and bury comparison rates. The licence is the hook that lets ASIC and AFCA reach them. Unlicensed assistance is worse in a simpler way: there may be no hook. That is the practical reason to ask for the number before you take the suggestion, and the reason a site that will not give you one is not a shortcut. It is a gap.