Action: There is no Preliminary Assessment on file. Please complete.
What you must do:
Please ensure a complete Preliminary Assessment is held on file.
Why is this important:
Under Section 115 of the National Consumer Credit Protection Act 2009 (NCCP) a preliminary assessment must be undertaken within 90 days before the application has been submitted to the lender. This means prior to suggesting a customer remain in a loan or apply for a particular loan you must have undertaken a preliminary assessment to confirm the loan is not unsuitable.
Action: The Preliminary Assessment was completed after lodgement. This must be completed prior to lodgement of the loan in the future.
What you must do:
Please ensure a complete Preliminary Assessment is held on file.
Why is this important:
Under Section 115 of the National Consumer Credit Protection Act 2009 (NCCP) a preliminary assessment must be undertaken within 90 days before the application has been submitted to the lender. This means prior to suggesting a customer remain in a loan or apply for a particular loan you must have undertaken a preliminary assessment to confirm the loan is not unsuitable.
Action: Your customer's name is not appearing. Please recomplete.
What you must do:
Please ensure all personal information has been entered correctly on the contacts section of the opportunity. This will ensure the customer’s information populates into the Preliminary Assessment. Once you have updated the contacts section, please recomplete the Preliminary Assessment.
Why is this important:
While the NCCP legislation does not prescribe the exact personal information which must populate in the Preliminary Assessment, without evidence the assessment belongs to that customer (i.e. identifying the customer’s name), the preliminary assessment would not hold in a legal dispute if the document was called upon to confirm the steps you had taken to ensure the loan was not unsuitable.
Action: Your customer's income is not appearing. Please recomplete.
What you must do:
Please ensure all information has been loaded correctly on the person record of the opportunity. This will ensure the customer’s personal information populates in the Preliminary Assessment. Once you have updated the record, please recomplete the Preliminary Assessment.
Why is this important:
While the NCCP legislation does not prescribe the exact personal information which must populate in the Preliminary Assessment, failing to include the customer’s income would indicate the preliminary assessment is incomplete.
The purpose of the preliminary assessment is to confirm (1) the loan was not unsuitable and (2) the customer can service without substantial hardship. Without including the customer’s income information on which the customer can service without substantial hardship, the preliminary assessment would be incomplete if called upon in a legal dispute to confirm the steps you have taken to verify the client can service without substantial hardship.
Action: Your customers' expenses are not appearing, please recomplete.
What you must do:
While the NCCP legislation does not prescribe the exact personal information which must populate in the Preliminary Assessment, failing to include the customer’s expenses (debts, liabilities and living expenses) would indicate the Preliminary Assessment is incomplete.
Please update the financials section with the verified information and recomplete the Preliminary Assessment.
Why is this important:
While the NCCP legislation does not prescribe the exact personal information which must populate in the Preliminary Assessment, failing to include the customer’s expenses would indicate the preliminary assessment is incomplete.
The purpose of the preliminary assessment is to confirm (1) the loan was not unsuitable and (2) the customer can service without substantial hardship. Without including the customer’s expenses (liabilities, debts, living expenses) it is difficult to evidence the customer can service without substantial hardship, and the preliminary assessment would be incomplete if called upon in a legal dispute to confirm the steps you have taken to verify the client can service without substantial hardship.
Action: The funding position shows a funds deficit. Please recomplete the calculator and update the Preliminary Assessment.
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 the calculator has been updated, recomplete the Preliminary Assessment evidencing a funds surplus on the calculator.
Why is this important:
While the NCCP legislation does not prescribe the exact information which must populate in the Preliminary Assessment, a product comparison calculator with a funds deficit calls into question the customer’s ability to complete the transaction without substantial hardship.
This evidences that you have undertaken the enquiries required to confirm the customer can complete the transaction.
Action: The product comparison is missing. Please complete the calculator and the Preliminary Assessment.
What you must do:
The product comparison calculator has either not been completed or was completed after the Preliminary Assessment. Ensure the product comparison calculator is held on the opportunity and recomplete the Preliminary Assessment to ensure this populates into the document.
Why is this important:
Under Section 116 of the NCCP, the Preliminary Assessment is your record that the proposed credit contracts are not unsuitable for the customer, and the recommended products meet the customer’s requirements and objectives. For the purpose of determining the recommended loan meets the requirements of the client, it is important to record which products have been deemed as not unsuitable. The products which you have recommended must therefore be documented within the preliminary assessment.
Action: Only one choice of lender is in the product comparison. Please document how you met your Best Interest Duty obligations and why a choice of lenders was not recommended.
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 that 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: Please update the Preliminary Assessment to include the needs analysis responses.
What you must do:
The responses to the Needs Analysis must be completed either through the Questionnaire or incorporated in the Client Centre prior to the completion of the Preliminary Assessment. Ensure the needs analysis responses are held on the opportunity and recomplete the Preliminary Assessment to ensure this populates into the document.
Why is this important:
Under Section 117 of the NCCP, before making a Preliminary Assessment you must make reasonable inquiries about the customer’s requirements and objectives in relation to the credit contract. The needs analysis responses evidence the steps taken to meet this requirement prescribed in the regulations.