Edition 44, May 2007

Finance brokers' code of conduct beefed up in WA

Western Australians will now be better protected when they get a loan through one of the state's 2300 licensed finance brokers.

Western Australia is already the only Australian state that licences finance brokers. The new Finance Broker's Code of Conduct, which comes into effect on 29 June 2007, provides that 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 fees and commissions received
  • make reasonable enquiries about the needs and financial circumstances of borrowers
  • genuinely believe that any loan arranged by the broker is appropriate for the borrower
  • disclose conflicts of interest
  • not refinance loans solely for the purpose of earning fees and commissions.

Brokers who disregard the new code face fines of up to $10,000 and the suspension or cancellation of brokers' licences.

Education will be conducted within the industry prior to the introduction of the code.

For more information visit www.docep.wa.gov.au/consumerprotection/financebrokers

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