ASIC restricts broker usage of the word 'independent'

by Mackenzie McCarty05 Dec 2012

Brokers are being advised that, from March 1, 2013, they will not be able to use the words "independent", or "independently owned" or any other similar terms in their company names or business name - unless any commissions received by the broker are fully rebated to the consumer.

The new s160B of the NCCP Act also mentions matters other than commissions, which have to be taken into account if the licensee wants to use the word “independent” in relation to credit services, such as gifts, restrictions relating to credit services and conflicts of interest.

ASIC says licensees will be responsible to ensure that their credit representatives or any other person providing or offering to provide a credit service to a consumer on behalf of the broker complies with the restrictions on the word “independent” as well.

If there are any brokers with company names or business names containing the word “independent” or similar, those names will have to be changed, with ASIC saying that usage of the word is misleading.

The MFAA has suggested to ASIC that they should contact any such licence holders and allow them some reasonable time to consider a new name.

COMMENTS

  • by Maria Rigoni 5/12/2012 10:35:09 AM

    My finance broking company is 100% "independently owned" by my husband and myself.
    ASIC can check the verification of this statement anytime on their Company Register.
    For the NCCP or ASIC or anyone else to say that my business is not INDEPENDENTLY OWNED and that I cannot publicly advertise that fact is misleading and deceptive.
    Any loan writer that does not have a direct remuneration contract in place with a particular lender is an "INDEPENDENT" contractor. They are not a staff member or agent of the lender. They merely hold an accreditation that demonstrates they have been trained by the lender in the lender's individual product and approval criteria and they are able to be tracked for volume of loans introduced so they can be discriminated against if they do not favour the accrediting lender.
    The commission is not paid to the independent contractor it is paid to the aggregator for the introduction of NEW BUSINESS by the aggregator... it is not payment for the outsourced lending tasks... brokers do this ex-gratuitous...
    The "COMMISSION" paid by the aggregator to the INDEPENDENT Contractor is GROSS BUSINESS TURNOVER that expenses have to be deducted from before wages can be paid!!!
    How does ASIC expect INDEPENDENT CONTRACTORS to be paid and remain solvent - charge the borrower.
    What a great outcome for Australians!!! The worker and the public.

  • by PeterT 5/12/2012 10:38:37 AM

    There should be a pre-requisite to being employed by ASIC, that anyone who comes up with this stuff should have previously run a small business.

  • by Larz 5/12/2012 10:48:54 AM

    Welcome to the new world of ASIC where someone can trade under a name for twenty years and build a brand and all the benefits that go with it only to be told that they have to change it due to some stupid decision by misguided public servants seeking to please their masters in Canberra.