Comment of the Week goes to...

by AB26 May 2014
The hot topic of the week yet again centres around broker accreditation getting cancelled by lenders without a reason being provided – but this time an industry meeting has been called to do something about it.

The Independent Finance Brokers Forum decided to do something about the contentious issue – first highlighted last month by Australian Broker – and have called a meeting on 30 May to let brokers put questions to MFAA chief executive Phil NaylorFBAA chief executive Peter White, Connective principle Mark Haron, Choice regional manager Jeanette Rowland and Outsource Financial chief executive Tanya Sale.

Brokers commenting on the article agree a meeting is the right step to take.

QEDRisk commended the industry bodies and aggregator heads who agreed to attend for tackling the problem. “You can see by the attendee list who in the industry really cares about this issue!”

However Skeptikal – who congratulated the IFBF for taking action – asked why the industry associations did not take this cause up before, when they get membership fees for advocacy.

Not so old broker questioned why the broker at the heart of the issue had his accreditation cancelled in the first place – “something to do with a court case or AML matter, where the lender/aggregator is stopped by law from talking to anyone about it?”

Many sides agreed, saying Not so old broker’s comment showed insight.

“Dealing with potential 'at risk' files is a difficult situation. With a file that is 'with lumps' it can be difficult to decipher if it is customer, loan writer or a collusion of both or perhaps a foolishly relied upon third party that is not smelling of roses. Lenders need to ensure accuracy wherever possible so that they protect all at risk parties.”

But Comment of the Week went to Patrick, who said:

“Yet another problem with the whole aggregation model (ie bank's mates interposed to steal income). When you join an aggregator you are not given any details of the ‘head introducer agreement’ between that aggregator and any lender. Your ‘sub-introducer agreement’ will state that you are subject to the terms of all and any ‘head introducer agreements’, but just try and get a copy!!!

“The reason the lender does not have to talk to the broker is that they have no contract with the broker, the cancellation is pursuant to the ‘head agreement’ with the aggregator. The only recourse the broker has is to commence civil proceedings against the aggregator as an accessory to a breach of the Trade Practices Act by the lender for unconscionable conduct.

“This would not surprise me as most large companies including banks have no trade practices compliance program whatsoever and are constantly breach of their obligations in the high handed manner in which they deal with small business, eg brokers.

“The Trade Practices Act has now been amended to extend the protection for consumers to small business. However, just try and lodge a complaint with ACCC, ‘too busy, underfunded, have you considered civil action’ is what you will be told. Just like ASIC they are asleep at the wheel.”

Read the article and more comments here.

COMMENTS