FBAA hits back at forum quitters

The Finance Brokers Association of Australia (FBAA) has hit out at “so-called consumer groups” for withdrawing from an industry forum at a time of great importance to the industry. FBAA managing director Peter White accused the quitters of a ‘huge dummy spit’. “Since when do legitimate advocates take their bat and ball and go home because they disagree with others?” It’s been reported that Choice, the Consumer Action Law Centre, Financial Counselling Australia and the Financial Rights Legal Centre have left the forum which exists to improve customer outcomes, preserve and promote competition and improve standards of conduct. “It’s ironic that they are citing the alleged failure of the group to commit to acting in the best interests of ¬borrowers, when that is the very cornerstone of the success of brokers. “The industry has worked well with ASIC, the Productivity Commission and Treasury to bring even greater transparency and accountability. Commissioner Hayne criticised banks for their lack of transparency and culture of greed.” “Choice is meant to stand up for consumers, but they have been found out for having commercial conflicts of interest that may have influenced their reviews. They clearly don’t understand this industry, but they seem to understand vacuum cleaners and dishwashers so maybe they should stick with these. “The FBAA has led from the front in ensuring borrowers’ interests are the primary driver in every case. Not only are we not blocking meaningful change, as claimed by Choice, but brokers are leading the change.” “The big banks will be the big winners if brokers are forced out of the industry, and borrowers will pay more in...

Brokers warn car buyers to have finance pre-approved before purchasing

The peak body for Australia’s finance brokers is urging car buyers to do their due diligence and use a reputable lending professional when accessing finance for motor vehicle purchases. Executive Director of the Finance Brokers Association of Australia (FBAA) Peter White said buyers should always have finance pre-approved in principle before entering a car yard to assist them in comparing different terms and conditions. “There has been wide publicity recently about the risks of motor dealership finance, particularly in light of the BMW decision to refund customers who were victims of irresponsible lending decisions. “Car buyers who use dealer finance have to make sure the person providing the finance is professional and is governed by a strict code of conduct and audit measures. It also provides security if they are a member of an industry body like the FBAA.” Mr White said it only takes a phone call or a simple online search to see if they are a member of a professional industry body. “Some motor dealers wrongly believe they are exempt from responsible lending guidelines, and the result is borrowers being given loans with terms and conditions that are not in their best...

Cheapest rate is not always the best warns broking leader

Interest rates may be at record lows but borrowers must remember this should not be the deciding factor in choosing the best mortgage product, according to the industry’s peak body for finance brokers. Peter White from the Finance Brokers Association of Australia says there has been much talk about cheap loan money but wants to remind borrowers to carefully assess their current and future financial needs. “The banks are competing to offer the cheapest interest rate but it’s a case of buyer beware because responsible lending is not done through bidding, auction or search engine sites,” he warned. The 37-year finance industry veteran said professional guidance from a finance broker is essential to ensure the loan is “not unsuitable” to the customer, not just for now but when circumstances change.” “You may be on a lower variable rate, but in some cases it may be prudent to fix part of your mortgage. This is when the right advice is essential. “Brokers are accredited professionals who know the market inside out and possess the experience to ascertain a loan that meets – if not exceeds – your needs, which in many cases does not necessarily mean the cheapest. “In fact, finance brokers are obligated through legislation to adhere to responsible lending practices” he explained. Mr White said finance broking is one of the country’s most regulated finance sectors, offering full transparency about the loan product as well as fees and...

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