As part of its Better Business Reforms agenda, the NSW Government has recently passed the Fair Trading Legislation Amendment (Reform) Act 2018 No 65.
The new law requires intermediaries to take reasonable steps to ensure that the consumer is aware of the existence of an arrangement under which the intermediary will receive a financial incentive, for example a commission or referral fees, before the consumer acts under that arrangement.
In the MFAA’s view, for finance brokers, this requirement will be met by giving the consumer a Credit Guide.
However, this is a new legal obligation for brokers arranging unregulated finance in NSW. All MFAA finance brokers, whether dealing in regulated or unregulated lending, should already be making this disclosure which is a requirement of Clause 10 of the MFAA Code of Practice.
These broker obligations come into effect on 1 July 2020.
Read more about the legislation here.