Regulation 23 of the National Consumer Credit Protection Regulations 2010 exempts vendor introducers from the Credit Act licensing and other requirements provided certain conditions are met.

Treasury has released a discussion paper reviewing the Regulation of Point of Sale Vendor Introducers which outlines a number of options for reform.

Who are vendor introducers?
According to the discussion paper, the two main categories of vendor introducers are persons located in vehicle dealerships and in retail outlets.

Vehicle dealerships encompass businesses that sell cars, bikes, boats and caravans.

Retail outlets that provide POS finance cover a diverse range of operations such as major stores, doctors, dentists, funeral homes, vets, travel agents, tyre fitters, garden shed installers, jewellers, swimming pool builders and sellers of gym equipment, computers, hi‐fi equipment and furniture.

It is estimated that currently in Australia the following numbers of vendor introducers are engaged in credit activities:
a) between 12,000 and 12,300 retailers (with approximately 75,000 staff); and
b) about 630 vehicle dealerships (with an estimated 30,000 persons engaging in credit activities).

Options for Reform
The Discussion Paper sets out three options in relation to regulating vendor introducers:
a) Option 1 — maintaining the status quo, by retaining the existing exemption in the Credit Regulations for vendor introducers;
b) Option 2—requiring vendor introducers to comply with the Credit Act; or
c) Option 3 — modifying the application of the obligations in the Credit Act to vendor introducers, according to the functions they are performing, so that vendor introducers who are more actively involved in product selection and delivery would be subject to a higher level of regulation.

Option 3 would result in vendor introducers operating under regulatory obligations as follows:
a) vendor introducers who act as a broker would be required to hold an ACL or be appointed as a credit representative by an ACL holder;
b) vendor introducers who act only on behalf of a single financier or under first or second choice arrangements would be subject to modified and limited regulation under the Credit Act; and
c) vendor introducers who have a role in product selection but have a limited role in arranging finance would be subject to different modified regulation under the Credit Act.