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.