Calls to level NCCP playing field

by Mackenzie McCarty21 Mar 2013

The MFAA is urging the federal government to revise credit protection legislation to include retailers in the same laws that apply to all other credit advisers and providers, including brokers.

The government is conducting a review of laws governing retailers (‘point-of-sale credit sector’) to determine the level of regulation they should operate under.

Treasury issued The Exemption of Retailers From The National Consumer Credit Protection Act 2009 in January and has called for submissions by March 25.

The paper sets out three options: The first is to maintain the status quo by retaining the exemption for retailers, the second is to require retailers to comply with the NCCP and be regulated in much the same way as credit representatives and the third is to modify the NCCP relating to retailers.

A formal submission made yesterday by the MFAA argues retailers, particularly vehicle dealers, who help arrange point-of-sale finance for consumers should not be exempt from the NCCP, which currently regulates credit providers who "engage in credit activities", including mortgage brokers others who assist consumers in applying for credit.

MFAA CEO, Phil Naylor, says continuing current NCCP exemptions to retailers will ‘weaken the integrity’ of the legislation by enabling consumer protection and competitive fairness gaps to appear.

“While point-of-sale credit providers may have a significant role in the consumer's product selection, they are not required to meet any standards and the consumer credit regulator...Yet the retailers can recommend a credit product, without having to do any assessment regarding its suitability for the consumer. There are also limitations on the ability of consumers to seek remedies for the conduct of retailers which do not provide appropriate financing deals.”

The government previously exempted ‘vendor-introducers’ – businesses that arrange finance in connection with the provision of goods and services – from the NCCP, pending a review of the sector.


  • by Brado 21/03/2013 9:22:57 AM

    Couldn't agree more.... consumers can be jammed by car dealers and their finance 'tricks' ( I know, I used to work in one ) and its only fair that people getting their second biggest loan behind a home loan, should be protected against shonky business tactics...

  • by Billy Bob Blogg 21/03/2013 10:22:26 AM

    there is more "upfront" commission in car Finance than there ever will be in arranging a Home Loan.