Back to contents

Code of Practice & Disputes Resolution Service

General Obligations of Finance Broker

A Finance Broker will:

Advise Clients and Credit Providers in writing that the Finance Broker is subject to the Code and FBAA DRS, which is available in the public section of the FBAA web site, www.financebrokers.com.au.
Make copies of the Code and DRS available and provide same if requested by a Client or Credit Provider or upon receipt of a complaint.

Provide suitable ongoing training for its employees and subcontractors having regard to the employees or subcontractor's role and responsibilities.
Take reasonable steps to ensure that its employees and subcontractors comply with the obligations set out above.

Maintain a current policy of professional indemnity insurance with an insurer that the Finance Broker usually deals with, and for the amount, that is acceptable to the Credit Provider or Finance Broker.
When requested to do so by a Client, Credit Provider, FBAA or DRS, provide evidence of a current policy of professional indemnity insurance.

Display in their place of business evidence of their current Accredited or Associate Membership of the FBAA, and to make available to Clients and Credit Providers a copy of the Code and FBAA DRS document and to advise Clients and Credit Providers of the Finance Broker's membership of any other ADRS.

Deposit (unless as otherwise required by law) by the next business day (or in any case promptly) any money received or held by the Finance Broker on trust for a Client into a trust account maintained by the Finance Broker with a government approved deposit-taking institution, which account must not contain any moneys other than moneys received or held on trust by the Finance Broker for Clients.
At the earliest practical opportunity, deliver money received or held by the Finance Broker on trust, to the party intended by the Client and not to any other party unless directed otherwise in writing by the Client.
Ensure that the Finance Broker's employees and subcontractors observe the above requirements for handling money received on trust from a client and must not request, require or induce a Client to pay or deliver money to the employee or subcontractor except as may be authorized by the Finance Broker in writing.

Disclose to the Client and Credit Provider any interest the Finance Broker, its employees or subcontractors or their family may have, or intends to have, in any loan transaction or related sale or purchase of property or goods and shall only act for either or both parties if they are fully informed of the Finance Broker, its employees or subcontractors or their family's interest and agree in writing to the Finance Broker, its employee or subcontractor continuing to act for them.

In the event a Client or Credit Provider instructs a Finance Broker to obtain a valuation of a property or goods the Finance Broker shall instruct a valuer nominated by the Client or Credit Provider or shall otherwise select an independent licensed valuer and take reasonable steps to ensure that the valuer has no interest whatsoever, financial or otherwise, in the property or goods to be valued or the Credit Facility for which the property or goods is required as security.
If the valuer is instructed by the Finance Broker the Finance Broker must ensure the valuer is provided with all necessary information regarding the property or goods to be valued as reasonably required by the valuer and ensure the valuation is carried out for secured lending purposes and that liability for the report is extended to the Client or Credit Provider as required.
Ensure that the Finance Broker does not have an improper business relationship with a valuer involved in a credit transaction, or receive any financial or other benefit as a result of instructing a valuer, and must be reasonably satisfied that the valuer is not subject to any coercion or inducement that might be intended to unreasonably influence the valuer's recommendations or judgment.

When acting in conjunction with another Finance Broker to negotiate or arrange a Credit Facility, and making an agreement with the other Finance Broker in relation to sharing remuneration, the total remuneration must not exceed the maximum remuneration as determined by any applicable state, territory or federal law in the lawful jurisdiction of the Finance Brokers and the Client.

Abide by the law applicable to the conduct of a Finance Broker's business which applies in the state or territory of the Finance Broker's business address and Client's residential address, until such time as any overriding state, territory or federal law regulates the conduct of Finance Brokers on a national uniform basis.