Guide to consumer protection

When it comes to choosing a professional to help get you a loan, the decision ultimately lies with you. Going by instinct is good, but there are a number of things consumers can do to increase their level of protection:

Only deal with members of professional industry bodies

[Deal with members of professional industry bodies. Generally members of such bodies would comply with the following]:

• Minimum level of experience in the industry or,
• Minimum educational qualifications and a commitment to continue education and training annually.
• Adherence to the strict Code of Practice which ensures ethical behaviour, professionalism, transparency and full disclosure of information.
• Probity checks.
• Membership of the Credit Ombudsman Service Limited (ASIC approved independent dispute resolution service).
• Professional Indemnity Insurance.

Talk the Talk

Spend some time increasing your knowledge on the types of loans available, interest rates etc. so you are more prepared when talking to a loan consultant. There are a number of resources available - books on choosing a mortgage, property and finance sections of newspapers, and the internet.

Interview the Interviewer

Research the individual or company you choose to deal with. Look at their website or visit their office. Before you start answering their questions, ask them some questions of your own. For example, how long they've been working in the industry or company, what their professional qualifications are, who is on their panel of lenders, how many clients they have, what commissions they receive.

Write and Read

Write down what's discussed during the meeting and ask the person to clarify or repeat any information which is unclear or confusing. Sum up what's been discussed and agreed at the end of the interview before leaving the office, or send an email or fax confirming this soon after.

Read any document which requires your signature very clearly. Don't sign if you are unsure about anything, it's easier to change an unsigned document than vice versa.

Get Qualified Advice

Your solicitor can help with legal documents, your accountant or financial planner can check your ability to service the loan, and you can get another valuation on the property.

Actions and Words

A person's actions, not words, often tell a lot more about character. The mortgage and finance industry is highly competitive which should equate to a high level of service for the borrower. If you are promised a return call in 48 hours and it's not made, or you are dissatisfied with the service you're getting, there are plenty of other loan providers out there who'll work hard to get and keep your business.

Mortgage & Finance Industry Legislation and Regulators

The Western Australian Government has had legislation in place in the credit industry since the 1970's. The NSW and Victorian Governments introduced legislation for finance brokers and it is anticipated that other States will follow suit. The ACT requires all brokers to be be registered. [Industry Bodies are] lobbying for nationally consistent legislation of the mortgage and finance industry.

_{Disclaimer: This document is for information purposes only, and must not be relied upon as a substitute for professional services or legal advice.}

_{Source: MFAA}