Have your say on home loan franchises

by AB30 Apr 2014
If you are a broker involved in a mortgage franchise model you may want to tell the government what you think of the new code of conduct for franchises.

Earlier this month the Federal Government released an exposure draft bill and regulations which outlined changes to the Franchising Code of Conduct and relevant provisions in the Competition and Consumer Act 2010. 

Submissions on the proposed changes, which the government said is designed to save the sector $8.6 million in red-tape, will close this week.

Home loan franchise Mortgage Choice told Australian Broker they would not be making a submission on the proposed amendments as they believe best practice has been applied to its franchisees for the past 21 years and this will not change due to legislation.

“We support the intent of the proposed changes, but we don't believe they will materially change the way Mortgage Choice operates its franchise business,” a spokesperson said.

The proposed changes include introducing penalties for breaches of the code to protect small business owners.

It would allow the Australian Competition and Consumer Commission to deal with serious breaches of the code by seeking civil pecuniary penalties of up to $51,000 from the court and issuing infringement notices of up to $8,500 without having to seek a court order.

The draft changes also make sure franchisees and franchisors act in good faith in their dealings with each other and improve disclosure, with easily understandable information for prospective franchisees.

The changes are expected to take effect from 1 January 2015.

Submissions can be made by 30 April via the Treasury website at www.treasury.gov.au.

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