Point of Sale Retailer Exemptions

The Consumer Credit Legal Centre has made a submission to the Commonwealth Treasury in relation to the exemption of retailers from the National Consumer Credit Protection Act 2009 (Credit Act). The CCLC has not supported the exemption of Point of Sale (POS) retailers from the Credit Act at any time. The CCLC considers the exemption to be a large loophole in the current consumer protections under the Credit Act.We believe it is critical that the protections of the National Credit Act be extended to POS retailers that engage in credit activities in relation to the sale of goods and services, rather than allow this unsatisfactory gap in consumer protection to continue.

Our submission recommends:

• ALL retailers (e.g. car dealerships, department stores that sell furniture and/or electrical goods) who engage in credit activities (arrange finance) should be regulated by the Credit Act, including:
  • Retailers who help arrange financing must either hold an Australian Credit License (ACL), or be appointed as a Credit Representative of someone who has an ACL
  • Retailers must join an External Dispute Resolution scheme
  • Retailers must meet Credit Act disclosure requirements and responsible lending obligations
  • Alternatively (as a second best option):
    • Car dealerships must either hold an ACL, or be appointed as a Credit Representative of one financier (with full disclosure about there only being one option available)
    • Other retail outlets (supplier representatives) would have modified obligations including-
      • EDR membership for the retailer (as opposed to individual staff members)
      • Modified responsible lending provided all financial details are taken directly from the consumer by the financier.

CCLC considers car yard finance an extremely high risk area for consumers and does not therefore support applying any modifications to the regulatory regime applying to other credit industry participants for car yard finance.