WA Finance Brokers Control Act: A Summary

The Western Australian Finance Brokers Control Act 1975 (the Act) governs the licensing and conduct of finance brokers operating within the state. Its primary objective is to protect consumers by ensuring that finance brokers are appropriately qualified, ethical, and accountable in their dealings.

Licensing Requirements

Under the Act, any individual or business that engages in the business of a finance broker in Western Australia must hold a valid finance broker’s license. This includes individuals who, for commission or reward, assist others in obtaining finance or credit. To obtain a license, applicants must meet specific criteria, including:

• Demonstrating relevant qualifications and experience in the finance industry.
• Passing a police clearance to ensure good character.
• Meeting prescribed financial requirements.
• Completing approved training courses.

Furthermore, the Act requires licensees to maintain professional indemnity insurance to protect consumers against potential losses arising from their professional negligence.

Obligations of Finance Brokers

The Act places several important obligations on finance brokers to ensure ethical and responsible conduct. These include:

• Acting in the best interests of their clients.
• Disclosing any conflicts of interest.
• Providing accurate and complete information about finance products.
• Conducting reasonable inquiries to determine the client’s needs and objectives.
• Not recommending unsuitable finance products.
• Complying with all relevant legislation and regulations.
• Maintaining proper records of their transactions.

Finance brokers are legally obligated to act with due care and skill when providing their services. They must exercise the same level of competence and diligence that a reasonable finance broker would exercise in similar circumstances.

Enforcement and Penalties

The Department of Mines, Industry Regulation and Safety (DMIRS), specifically through Consumer Protection, is responsible for administering and enforcing the Act. DMIRS has the power to investigate complaints against finance brokers and take disciplinary action against those who breach the Act.

Penalties for violating the Act can include fines, suspension or cancellation of licenses, and in some cases, even criminal prosecution. The Act also provides consumers with avenues to seek redress for losses suffered as a result of a finance broker’s misconduct.

Key Protections for Consumers

The Finance Brokers Control Act provides significant protection for consumers seeking finance. By requiring brokers to be licensed, qualified, and subject to ethical obligations, the Act helps to ensure that consumers receive sound advice and are not exploited. It also provides a mechanism for consumers to complain and seek redress if they have been harmed by a broker’s actions.

In conclusion, the WA Finance Brokers Control Act plays a crucial role in maintaining integrity and consumer protection within the finance broking industry in Western Australia.