What is a credit representative?

You are a credit representative under the National Consumer Credit Protection Act 2009 (Cth) (the “NCCP Act”) if you are authorised to engage in credit activities on behalf of an Australian credit licensee.

To appoint a credit representative an Australian credit licence (“ACL”) holder must give written notice to the person or body corporate they wish to authorise. There is no particular form required, but both the credit representative and the licensee should retain a copy of the consent for their records.

As a credit representative you may be authorised to engage in some or all the activities authorised under the ACL of the licensee. However you cannot engage in credit activities as a credit representative which exceed the authority under the ACL. For example, a licensee authorised to engage in activities other than as a credit provider can authorise a representative to engage in these activities, but not to provide credit.

If you are a company appointed as a credit representative, your directors and employees are not automatically authorised to conduct credit activities. You will need to sub-authorise them, and you must obtain consent from the licensee to do so. The sub-authorised credit representatives also become credit representatives of the licensee.

You may be a credit representative of two or more credit licensees, but each licensee must consent to you being a credit representative of the other, or each of the licensees must be a related body corporate of the other.

It is possible to be both a credit licensee and a credit representative but only where they are for different authorised credit activities. For example, you can be a licensee authorised to engage in credit activities as a credit provider and be authorised as a credit representative to provide credit assistance for another credit provider.

The credit licensee will ultimately be responsible for your credit activities as a credit representative, so they will want to ensure that you as their credit representative meet minimum compliance and training requirements.

Licensees and corporate credit representatives must notify ASIC when new credit representatives are authorised or sub-authorised, where the credit representatives’ details have changed, or the authorisation has been revoked or varied.

Under the NCCP Act a credit representative is one form of a representative of a licensee. A representative is basically anyone who is acting on behalf of a licensee. As well as credit representatives, representatives include employees and directors of the licensee and its related companies. Employees or directors of the licensee and its related companies do not have to be appointed as credit representatives, but any other person acting on behalf of the licensee will generally need to be a credit representative unless the credit activity that they are performing falls within one of the licensing exemptions.

We recommend that you seek legal advice about accepting an appointment as a credit representative.