Under the new National Consumer Credit regime, if you act as an intermediary between a consumer and the credit provider for the purpose of securing consumer credit with the credit provider, the general rule is that you will be engaging in a credit activity, which means you will need an Australian Credit Licence – unless you’re acting as a credit representative of the credit provider. The same applies for consumer leases.

However, there is a proposed exemption for intermediaries who perform only a limited referral role. This is in the draft regulations (the National Consumer Credit Protection Regulations 2010. The draft regulations were released for comment in November 2009).

The exemption (in regulation 26) would exempt a referrer from having to obtain an Australian Credit Licence where the only credit activity is as follows:

• the referrer informs the consumer that a licensee, or a representative of the licensee, is able to provide a particular credit activity or a class of credit activities; and
• the referrer gives the consumer information about how the consumer may contact the licensee or representative.

However the exemption only applies if the referrer, at the time of doing the above, also discloses to the consumer any commission or other benefits that the referrer (or an associate) may receive in respect of the activity, or that is attributable to the activity.

The disclosure about benefits must be in the same form as the information given about the licensee and the licensee’s contact details.

For example, if the information about the licensee is given on the internet, the information about benefits must also be given on the internet (although the referrer could also disclose the information by other means as well as on the internet).

The reason for the requirement to disclose benefits is so that consumers are aware that the referrer has an interest in the outcome of the referral.

If you are an intermediary thinking about relying on the referrer exemption for some or all of your credit activities, you should be very careful to ensure that those credit activities will fall entirely within the exemption.

For example, if instead of just informing a consumer that a particular lender offered home loans, you suggested that a consumer apply for credit with that lender, then you would be providing credit assistance, which is a form of credit activity requiring an Australian Credit Licence. The term ‘suggest’ is not defined in the legislation, but ASIC thinks that it involves:

• proposing the idea to a consumer; or
• introducing into the mind of a consumer that the consumer apply for a particular credit contract with a particular credit provider: see ASIC RG 203 .

ASIC says that ‘suggesting’ can include making a recommendation or giving advice. However a suggestion could be something less than a recommendation or advice, on the interpretation given by ASIC.