Responsible Lending: Quote

If you are going to charge a fee for your services to a client (commitment fee/service fee/ and any third party fees) you must provide a quote document to your client.

This must be prepared, signed and dated by the client prior to submission of the application in order for the quote to be enforceable.

A signed copy needs to be held in Nexus within the attachments tab on the opportunity and the client must also be provided a signed copy.

The credit quote must clearly identify that it is a quote and must set out:

• What credit assistance and other services it covers
• The maximum amount payable by the consumer to you for the credit assistance and other services that you will provide including any other fees or charges incurred for matters associated with providing your services
• The total amount payable by the consumer to you or any other person, even if the transaction does not proceed.

You cannot require clients to:

• Pay for credit assistance before it is provided
• Pay for credit assistance if you have not provided a credit quote
• Pay more than the maximum amount that has been quoted

The quote needs to be provided to the client upfront along with the credit guide.

If you do not charge a fee for service then you do not have to provide the quote to your clients.

The quote template can be generated from the Disclosure Documents tab in Nexus (number 2 in the box). Remember: this does not have to be generated if you are not charging a fee for service.

Note: Credit representatives are permitted to recover the cost of commissions clawed back from clients whose loan was drawn down before 1 January 2021 provided they have a properly signed credit quote from the client agreeing to this.

Credit representatives cannot pass the cost of commission clawbacks to clients in relation to loans drawn down after 1 January 2021, even if the client consents.

If you have any questions relating to this topic contact compliance@connective.com.au