Action: No funding calculator completed on the opportunity. Please complete the calculator.
What you must do:
On the opportunity, complete the funding position calculator for the transaction including all sources of funds which will be contributed towards the transaction.
Why is this important:
Under Section 117 of the NCCP you must make reasonable enquiries about the customer’s financial situation and take reasonable steps to verify the customer’s financial situation. If you are not able to evidence the customer can complete the transaction, it calls in to question the steps taken to assist the customer with applying for a credit contract when there could be a financial impact on the customer for entering into the transaction.
Action: The calculator shows a funds deficit. Please recomplete.
What you must do:
Ensure that all sources of funds contributing to the transaction have been included in the funding position calculator. This could include savings, collateral security, gifted funds, other loans, grants and any other monies which are being used towards the transaction. Once all sources have been entered, ensure the funding calculator evidences a surplus.
Why is this important:
Under Section 117 of the NCCP you must make reasonable enquiries about the customer’s financial situation and take reasonable steps to verify the customer’s financial situation. If you are not able to evidence the customer can complete the transaction, it calls in to question the steps taken to assist the customer with applying for a credit contract when there could be a financial impact on the customer for entering into the transaction.
Action: No product comparison calculator completed on the opportunity. Please complete the calculator.
What you must do:
On the opportunity, complete the product comparison calculator to identify the loans which meet the customer’s needs, requirements and objectives.
Why is this important:
One of the key steps in adhering to the Best Interests Duty obligations is to present recommendations and choice to your clients on a range of options that meet their requirements. You must be able to present the lenders recommended in a consistent format so the customer can make an informed decision.
Without evidencing the product comparison calculator, you cannot evidence you have met a Best Interests Duty obligation to present a range of options to your client.
Action: Only one product/lender recommended. Please provide additional notes in the compliance centre under other lender options considered.
What you must do:
Where only one choice of lender has been presented to your clients for consideration you must document why additional options were not considered and how you acted in the customer’s best interests when a range of options were not presented.
Why is this important:
One of the key steps in adhering to the Best Interests Duty obligations is to present recommendations and choice to your clients on a range of options which meet their requirements. If there is only one lender which is suitable, it must be clearly documented why a range of options were not considered. This could be due to the client’s individual circumstances whereby they will only meet the policy of one lender however this must be sufficiently documented.
Action: No borrowing calculator completed on the opportunity. Please complete the calculator.
What you must do:
On the opportunity, complete the borrowing calculator to evidence the customer can service the loan without substantial hardship.
Why is this important:
Under Section 117 of the NCCP you must make reasonable enquiries about the customer’s financial situation and take reasonable steps to verify the customer’s financial situation. You must also be able to evidence the customer can service the proposed credit contract without substantial hardship.
Action: The calculator is missing liabilities evident on the bank statement. Please update.
What you must do:
On the opportunity, update the borrowing calculator to evidence the customer can service the loan including the additional liabilities evident on the bank statement.
Alternatively, if the customer is going to be closing these liabilities, or the liabilities have since been closed you will need to obtain additional documentation from the customer to confirm this such as (1) an email confirming facilities will be paid out and closed following settlement or(2) evidence from the existing financial institution that the liability has been paid and closed.
Why is this important:
Under Section 117 of the NCCP you must make reasonable enquiries about the customer’s financial situation and take reasonable steps to verify the customer’s financial situation. You must also be able to evidence the customer can service the proposed credit contract without substantial hardship.
Action: The calculator is missing liabilities evident in Apply on Line. Please update.
What you must do:
On the opportunity, update the borrowing calculator to evidence the customer can service the loan including the additional liabilities evident in the financials tab on Apply on Line.
Alternatively, if the customer is going to be closing these liabilities, or the liabilities have since been closed you will need to obtain additional documentation from the customer to confirm this such as (1) an email confirming facilities will be paid out and closed following settlement or (2) evidence from the existing financial institution that the liability has been paid and closed.
Why is this important:
Under Section 117 of the NCCP you must make reasonable enquiries about the customer’s financial situation and take reasonable steps to verify the customer’s financial situation. You must also be able to evidence the customer can service the proposed credit contract without substantial hardship.
Action: The calculator is missing dependents. Please update the calculator or document the reasons why a dependent has not been included.
What you must do:
On the opportunity, update the borrowing calculator to evidence the customer’s dependents and can continue to service the loan amount being applied for.
Why is this important:
Under Section 117 of the NCCP you must make reasonable enquiries about the customer’s financial situation and take reasonable steps to verify the customer’s financial situation. You must also be able to evidence the customer can service the proposed credit contract without substantial hardship.
Action: The income used in the calculator is not supported by the documents. Include commentary on the figure used or recomplete the calculator.
What you must do:
The income which has been listed in the borrowing calculator is not supported by documentation held on file. This could be (a) no documentation is held in Mercury or AOL for the income used or (b) the income in the calculator is stated at a higher amount than what is evidenced on the opportunity.
You must be able to evidence the income used in the borrowing calculator is supported by documentation. Please obtain additional documentation which confirms the income used or, recomplete the calculator on the lower level of income which is evident on the documents provided.
Why is this important:
Under Section 117 of the NCCP you must make reasonable enquiries about the customer’s financial situation and take reasonable steps to verify the customer’s financial situation. You must also be able to evidence the customer can service the proposed credit contract without substantial hardship.
Action: Provide evidence as to how you verified the monthly living expense commitment used in the borrowing calculator to determine uncommitted monthly income.
What you must do:
Under responsible lending, you must take steps to verify the customer’s financial situation. As there are either no transaction accounts or limited transaction accounts which evidence the customer’s monthly living expenses, please document what steps you took to verify the figure used in the borrowing calculator.
Why is this important:
Under Section 117 of the NCCP you must make reasonable enquiries about the customer’s financial situation and take reasonable steps to verify the customer’s financial situation. You must also be able to evidence the customer can service the proposed credit contract without substantial hardship.