Action: Provide evidence this was given to your customer prior to lodgement or document the reasons this was not supplied.
What you must do:
Evidence of how the Summary of Requirements and Credit Proposal was provided to the customer prior to the application being lodged. If you have supplied your customer with a hard copy of the Summary of Requirements Credit Proposal, make a note outlining when this was given to your customer. Alternatively, upload a copy of the email evidencing this was supplied to the customer.
If you did not provide a copy of the document to your customer before the application was lodged, you must document the reasons why this was not supplied. You must also send a copy of the Summary of Requirements and Credit Proposal to your customer for signing and upload a copy of the email as evidence this has now been completed. Once a signed copy of the Summary of Requirements and Credit Proposal has been received from the customer, this must also be uploaded to Mercury.
Why is this important:
Under Section 121 of the National Consumer Credit Protection Act 2009 (NCCP), a Credit Proposal Disclosure must be given to the customer at the same time as providing credit assistance. This means the Summary of Requirements and Credit Proposal Disclosure must be given to the customer prior to the application being lodged to the lender.
Action:
1. The product details are missing, please update and email to your customer.
2. The interest only details are missing, please update and email to your customer.
3. The loan amount is lower than lodged to the lender, please update and email to your customer.
4. The recommended lender and product are different to the application lodged, please update and email to your customer.
What you must do:
Ensure a correct Summary of Requirements and Credit Proposal is held on file which reflects the correct details of the loan amount applied for under the proposed lender and product, including but not limited to:
The correct lender is disclosed
The correct product is disclosed
The correct loan amount is disclosed
The correct interest-only period has been disclosed
Please upload a copy of the email evidencing when the Summary of Requirements and Credit Proposal was provided to your customer prior to lodging the application to the lender. If you provided a hard copy document to your customer, create a note outlining when this was supplied.
If you did not provide a copy of the Summary of Requirements and Credit Proposal to your customer before the application was lodged, you must document the reasons why this was not supplied. You must also send a copy of the Summary of Requirements and Credit Proposal to your customer and upload a copy of the email as evidence this has now been completed.
Why is this important:
Under Section 121 of the National Consumer Credit Protection Act 2009 (NCCP), a Credit Proposal Disclosure must be provided to your customer prior to the application being lodged to the lender. The document must reflect the proposed lender and loan and a reasonable estimate of the fees which will be paid in applying for this product if any.
The Credit Proposal Disclosure must also provide the customer with a reasonable estimate of the commission you will receive for assisting the customer with applying for the loan and any other fees which will be paid or received, including fees that will be paid to any referral partner.
What happens if the lender or product changed?
If the initial lender or product proposed changes, a new Summary of Requirements and Credit Proposal is required to be completed in most cases. The exception to this rule is if the lender and product remain the same but the loan amount decreases. Under the NCCP legislation, this is because your initial Summary of Requirements and Credit Proposal was based on the higher loan amount and so your potential commission has been over disclosed. In all other instances, a new Summary of Requirements and Credit Proposal is required.
You will need to retain the original Summary of Requirements and Credit Proposal Disclosure on fie as record this was supplied to the customer for the first proposed application and rename this as (Lender) or (Superseded) or (Original Product) to differentiate between the first and the subsequent document.
More information on when a new document is required can be found here.
Action: Please upload a copy signed by your customers.
What you must do:
It is a requirement to provide the customer with the Summary of Requirements and Credit Proposal as outlined under Section 121 of the National Consumer Credit Protection Act 2009 (NCCP), and obtain a signed and accepted document. The copy which has been signed by the customer must be held in Mercury.
Action: The Summary of Requirements and Credit Proposal is not on file, please update and email a copy to your customer.
What you must do:
As a Connective Credit Representative, the Credit Proposal Disclosure (CPD) was updated to the Summary of Requirements and Credit Proposal in 2020 in preparation for Best Interests Duty obligations. The CPD which has been issued to the customer is the incorrect version and you are required to complete the Summary of Requirements and Credit Proposal Disclosure.
Please complete the Summary of Requirements and Credit Proposal and issue this to your customer. Ensure your Best Interests Duty commentary is included in the document. Do not delete your original CPD, but rename this as 'superseded ' as this will evidence you made the correct disclosures under Section 121 of the NCCP to the customer prior to the loan application being lodged to the lender.
Action: The document is missing the Best Interests Duty commentary, please update and email to your customer.
What you must do:
The Summary of Requirements and Credit Proposal Disclosure which has been issued to your customer does not include all the information required under (1) The customers’ requirements and objectives and (2) The reason for the final choice of lender selected.
Please document your Best Interests Duty commentary in the compliance centre and reissue the Summary of Requirements to your customer. You must also attach a copy of the email which evidences this has been supplied to your customer and upload a signed and accepted copy to Mercury.
How to access the Compliance Centre
Handy hints for documenting your BID obligations – requirements and objectives and the reason for the final choice of lender.
Why is this important:
Under the Best Interests Duty obligations, you must be able to evidence you have provided a recommendation of one or more products and how these products achieved the customer’s requirements and objectives to allow them to make an informed decision. As a Connective Credit Representative, the Summary of Requirements and Credit Proposal evidences your adherence to these obligations.
Action: The document is missing the product comparison, please update and email a copy to your customer.
What you must do:
The Summary of Requirements and Credit Proposal which has been issued to your customer does not include the product comparison. Please ensure the product comparison calculator has been completed and reissue the Summary of Requirements and Credit Proposal to your customer. You must also attach a copy of the email which evidences this has been supplied to your customer and upload a signed and accepted copy to Mercury.
Why is this important:
Under the Best Interests Duty obligations, you must be able to evidence you have provided a recommendation of one or more products and how these products achieved the customer’s requirements and objectives to allow them to make an informed decision. As a Connective Credit Representative, the Summary of Requirements and Credit Proposal evidences your adherence to these obligations.
Action: You must provide evidence a Credit Proposal Disclosure was given to your customer.
What you must do:
Upload evidence the Credit Proposal disclosure was provided to the customer prior to the application being lodged. If you did not provide a copy of the document to your customer before the application was lodged, you must document the reasons why this was not supplied.
Why is this important:
Under Section 121 of the National Consumer Credit Protection Act 2009 (NCCP), a Credit Proposal Disclosure must be given to the customer at the same time as providing credit assistance. This means the Credit Proposal disclosure must be given to the customer prior to the application being lodged to the lender.
Note: Connective's Credit Proposal Disclosure (CPD) was updated to the Summary of Requirements and Credit Proposal in 2020 in preparation for Best Interests Duty obligations.
Action:
1. The recommended product details are missing in the Credit Proposal Disclosure. Please recomplete and provide to your customer.
2. The loan amount is lower than lodged to the lender in the Credit Proposal Disclosure. Please update and email to your customer.
3. The lender or product in the Credit Proposal Disclosure is different to the product or lender the application was lodged to. Please recomplete and provide to your customer.
What you must do:
Ensure a correct Credit Proposal Disclosure is held on file which reflects the correct details of the loan amount applied for under the proposed lender and product, including but not limited to:
The correct lender is disclosed
The correct product is disclosed
The correct loan amount is disclosed
The correct interest-only period has been disclosed
Why is this important:
Under Section 121 of the National Consumer Credit Protection Act 2009 (NCCP), a Credit Proposal Disclosure must be provided to your customer prior to the application being lodged to the lender. The document must reflect the proposed lender and loan and a reasonable estimate of the fees which will be paid in applying for this product if any.
The Credit Proposal Disclosure must also provide the customer with a reasonable estimate of the commission you will receive for assisting the customer with applying for the loan and any other fees which will be paid or received, including fees that will be paid to any referral partner.
What happens if the lender or product changed?
If the initial lender or product proposed changes, a new Credit Proposal is required to be completed in most cases. The exception to this rule is if the lender and product remain the same but the loan amount decreases. Under the NCCP legislation, this is because your initial Credit Proposal was based on the higher loan amount and so your potential commission has been over disclosed. In all other instances, a new Credit Proposal is required.
More information on when a new document is required can be found here.