The Consumer Credit Legislation Amendment (Enhancements) Act 2012 prohibits the use of the following words when providing credit services from 1 March 2013:

• “independent”;
• “impartial”;
• “unbiased”;
• “financial counsellor”;
• “financial counselling”;
• “reverse mortgage”.

The prohibition is technology neutral and therefore applies equally to websites and print and other media.

You will need to implement procedures to ensure these terms are not used unless the defences apply.

Restricted terms
Section 160B will prohibit a licensee, when providing credit services, from using the following terms (either alone or in combination with other words or letters) in a representation to the consumer about the licensee, the service, or the licensee’s actions in providing the assistance:
• ‘independent’;
• ‘impartial’;
• ‘unbiased’; and
• any other term (in English or any other language) of similar meaning to those words.

However, it is a defence to using those terms if all of the following requirements are satisfied:
• the licensee does not receive any commissions (apart from commissions that are rebated in full to the person’s clients) or any other gifts or benefits from a credit provider or lessor that may reasonably be expected to influence the licensee; and
• the licensee’s employer (if any) or any other person (or class of person) that may be identified in the regulations does not receive any of the commissions, gifts or benefits described above;
• in providing a credit service, the licensee does not operate under any direct or indirect restrictions, other than restrictions imposed by the NCCP Act or by an Australian credit licence; and
• in providing a credit service, the licensee does not operate under any conflicts of interest that might arise from the person’s associations or relationships with credit providers and lessors, that may reasonably be expected to influence the person in providing the services.

Section 160C will prohibit a licensee, when providing credit services, from using the following terms (either alone or in combination with other words or letters) in a representation to the consumer about the licensee, the service, or the licensee’s actions in providing the assistance:
• ‘financial counsellor’;
• ‘financial counselling’; and
• any other term prescribed by the regulations that is of similar import to these phrases (whether in English or any other language).

However, it is a defence to using those terms if :
• they are providing, or offering to provide, the credit service on behalf of another person (the principal);
• they are a representative (as defined in section 5 of the NCCP Act) of the principal;
• regulations exempt the principal from this prohibition in relation to a credit activity because the principal engages in the activity as part of a financial counselling service; and
• the person’s actions in providing or offering to provide the credit service are within the authority of the principal.

The effect of the defence is to allow these terms to only be used by Government funded or not for profit financial counsellors.

Section 133DEwill prohibit a licensee, in providing or offering to provide a credit service to a consumer, from using the phrase “reverse mortgage” (either alone or in combination with other words or letters) in a representation to the consumer about an actual or proposed credit contract or mortgage.

It is a defence if:
(a) the representation truly represents that a credit contract:
(i) is or will be a credit contract for a reverse mortgage; or
(ii) is not or will not be a credit contract for a reverse mortgage; or
(b) the representation truly represents that a mortgage:
(i) is or will be part of a reverse mortgage; or
(ii) is not or will not be part of a reverse mortgage.

“Reverse mortgage” is defined in new section 13A of the National Credit Code.