Code of conduct

The First Chartered Capital Code of Conduct sets down the minimum standard of good practice that is expected from our Members and staff as they carry out their business.  It is designed to promote fair dealing between our customers and our members.  

The code is taken from the MFAA code of conduct and is designed to reflect industry best practice and whilst it is not legislation it is binding on all members of First Chartered Capital.

Part 1

Name of Code
This Code is the First Chartered Capital Code of Practice.

Objectives of the Code
The objectives of the Code are:

• to establish professional standards of consumer/Member dealings in the Mortgage Industry
• to promote commitment by First Chartered Capital Members to compliance with laws and regulations in the spirit of those laws and regulations
• to promote ethical and fair business practices to the benefit of consumers and the public and Members
• to promote education and professional programs for Members

Ongoing relevance of the Code
First Chartered Capital will actively review changes in the Mortgage Industry and mortgage practice with a view to ensuring the maintenance of good Mortgage Industry practice at all times and will amend this Code where this a need or benefit to consumers in doing so.

Application of the Code
This Code of Practice applies to and is binding on every

• Member of the FCC group
• Staff member of a Member
• Staff member of First Chartered Capital

This Code applies to and binds and continues to apply to and to bind a Member to whom the Code applies notwithstanding that the Member has ceased for any reason to be a Member of First Chartered Capital after the date (or when more than one on the last of such dates) upon which the facts giving rise to the complaint by the consumer occurred.

The Board of First Chartered Capital may from time to time prescribe that this Code applies to a particular class of transaction not otherwise referred to in this Code. Any such prescription shall as between a Member and First Chartered Capital, or as between Members, be final and binding.

Part 2

Essential Requirements to become and remain a Member to whom the Code Applies
Qualifications and Experience of Mortgage Originators and Finance Brokers

First Chartered Capital Members must have qualifications or experience relevant to the functions to be performed and to the satisfaction of the Industry Bodies.

All First Chartered Capital Members and staff must also keep up to date with the laws and practices in the Mortgage Industry as they change and evolve. They must undertake continuing education programs recognised by the Industry Associations and earn sufficient “accreditation points” to maintain membership.

First Chartered Capital Members must ensure that at all times they employ operatives and engage agents who have the qualifications or experience necessary to deal competently and professionally with consumers.

Professional Indemnity Insurance
First Chartered Capital Members must at all times maintain Professional Indemnity insurance:

• of not less than $2 million, and
• endorsed to cover a Determination made by the Credit Ombudsman, and
• unless otherwise specified, with an extension for Fidelity cover of not less than $150,000.

The terms and conditions of that insurance must at all times meet other minimum standards as set by the industry associations from time to time.

The purpose of the requirement for Professional Indemnity Insurance is to ensure that any third party who has suffered a loss due to some act or default of a First Chartered Capital Member has recourse to the proceeds of the insurance policy irrespective of the Member’s own financial capacity to meet a successful claim against that Member.

Part 3

Practice Standards for First Chartered Capital Members
The Practice Standards set out hereunder apply to and bind Members of First Chartered Capital, subject to the provisions of this Code of Practice.

In these Standards, “Member” means a Member, their staff or a staff member of FCC who acts for a party to a transaction which involves or may involve the provision of credit secured by way of mortgage over residential real estate; who acts for a party to a transaction which involves or may involve the provision of credit secured over real estate other than residential real estate. Where the word “Member” is used, the Practice Standard applies to and binds all Members except where “Member” means Member to whom the COSL Rules apply, or as otherwise specified.

Compliance with Laws and the First Chartered Capital Code of Practice
A Member must always comply with this Code, the Corporations Act 2001, the Uniform Consumer Credit Code, the Trade Practices Act 1974 and other Fair Trading legislation, and other laws and regulations applying to a loan transaction from the time of loan enquiry until the loan is discharged.

Appropriate Finance
A Member must suggest or recommend to an applicant only those arrangements for finance that the Member genuinely and reasonably believes are appropriate to the needs of that applicant.

A Member must not engage in Churning by receiving a commission, payment or other incentive for negotiating a refinanced loan for a consumer, with a different lender from the lender which originally financed the loan for the same property, and the consumer is not better off as a result of the refinance.

A  Member must, before a consumer signs a Letter of Engagement with the Member, provide to the consumer a recommendation that where the Member is acting as agent for a Credit Provider the applicant should seek and rely upon their own enquiries about the competitiveness and suitability of the Loan.
Loan Applications
A Member must always disclose to an applicant all relevant details known to the Member about a proposed loan at the time of application.

A Member must always make such enquiries as are necessary to determine an applicant’s capacity to repay the proposed loan.

A Member must submit a loan application to the Credit Provider, whenever possible, within five (5) business days (but in any case promptly) after receipt of a duly completed application, supplying all information required by the Credit Provider to make the decision whether or not to grant the loan applied for.

A Member must always keep an applicant informed of all relevant information known to the Member relating to a proposed loan to the extent that that information applies to that applicant.

Outcome of Loan Application
A Member must advise an applicant of the outcome of the loan application, whenever possible, within five (5) business days (but in any case promptly), of the loan decision being notified by the Credit Provider to the Member.

A Member must refund amounts which may be due to the applicant as provided for in any agreement between the applicant and the Commercial Loan Member or otherwise promptly after the decision to decline the loan application is notified to the applicant.

Confidentiality
A Member must at all times keep confidential information provided by an applicant and will only disclose information as may be required by law or as authorized by the applicant.

Fees and Commissions
If a fee or ongoing commission will or may be paid by or to the Member for or in connection with a loan or an application for a loan, the Member must always disclose to the applicant:

•  
• (a) that fact; and
• (b) the person by whom the fee or commission is payable; and
• (c) the person to whom the commission is payable; and
• (d) the amount of the fee or commission if ascertainable; and
• (e) if the fee or commission is un-ascertainable, the basis of or formula for
• such fee or commission;

But this paragraph does not apply to:

• (f) fees payable by a supplier under a merchant service agreement with a
• credit provider;
• (g) the amount payable in connection with a credit related insurance contract; or
• (h) Commission paid to employees of the Member.

Commission Disclosure
A member will have satisfied the Code of Practice  if:
(a) where the member is paid by or on behalf of the lender, the member discloses
that:
(i) a commission may be paid;
(ii) the commission will be paid by or on behalf of the lender (there is no
need to identify the name of the lender);
(iii) that the commission is payable to the member;
(iv) the amount of the fee or commission if ascertainable;
(v) if the fee or commission is unascertainable, a statement that the
commission comprises (as appropriate):
• an upfront payment equal to a percentage of the principal sum;
and
• an ongoing commission throughout the term of the loan based
on a percentage of the amount owing from time to time.

A Member must never charge an applicant a non-refundable application fee for a loan submission where the Member knows or suspects that there is little or no chance of the loan being approved.

Skill, Care and Diligence
A Member must act with all due skill, care and diligence in their Mortgage Industry dealings.

A Member must always ensure that they, their associates and staff are thoroughly knowledgeable in those areas and aspects of the Mortgage Industry in which they participate.

A Member must undertake all necessary education and other Member endorsed programs to maintain and further their and their staff’s professionalism.

A Member must take all reasonable steps to ensure that the finance applied for is obtained and property settlement completed in a timely fashion.

Member Keeping/Advising/Telling an Applicant/Borrower/Customer
The responsibility for providing the advice under the Code of Practice shall be deemed to be limited to the person directly dealing with the borrower/customer as per the disclosure of commission requirements.

Honest and Honourable Dealings
A Member must establish and maintain honest and honourable relationships with all persons with whom they may come into contact in the course of their professional and commercial activities.

A Member must express written terms and conditions of their services in plain language and provide a fair and balanced view of the relationship between the applicant or borrower and the Member.

A Member must tell an applicant or borrower how any variation of the terms and conditions of their services will be notified and will give the applicant or borrower reasonable notice before any variation takes effect.

A Member must not engage in any acts or omissions of a misleading, dishonest, deceptive or fraudulent nature.
A Member must ensure that a Member’s advertising will not be misleading, dishonest or deceptive.

Complaints Handling
A Member must always tell a consumer who makes a complaint by telephone the name of the Member’s “Complaints Contact Person”.

A Member must always ensure that the Complaints Contact Person has the authority to determine and respond to any complaint made by a consumer.

A Member must always maintain a written policy on complaints handling which must be provided to the Complaints Contact Person.

A Member must ensure that a consumer is treated courteously when making a complaint to a Member.

A Member must not, subject to statutory requirements, impose any fee on a consumer who makes a complaint.

A Member must always tell a consumer about the COS and about how, and to whom, to make a complaint whenever a consumer informs the Member that the consumer believes that the complaint has not been dealt with satisfactorily by the Complaints Contact Person.

A Member must keep displayed in the Member’s offices a leaflet publicising the COS.

A Member must always respond in writing to the Scheme Manager, whenever possible, within fifteen (15) business days (but in any case promptly) after receipt by a Member of a written complaint referred to that Member by the Scheme Manager for response.

A Member must always maintain a record of written complaints made against that Member in the form and manner stipulated by the Member from time to time.

Conflict of Interest
A Member must frankly and fully disclose any actual, apparent or potential conflict of interest of which a Member is or ought to be aware to the extent that such a conflict of interest may concern a consumer.

Member Vicarious Liability
A Member is vicariously liable for any acts or omissions of any employee or representative that embarrasses, impugns or discredits the MFAA or brings the MFAA or the mortgage industry into disrepute or may do any of those things. Any such acts or omissions are deemed to be a breach of this Code of Practice by the Member.

A Member must always conduct that Member’s business in accordance with this Code of Practice, act in a professional and courteous manner towards consumers and fellow Members, and refrain from any conduct which may embarrass, impugn or discredit First Chartered Capital or bring First Chartered Capital into disrepute.

A Member must immediately advise any Member in a lending transaction of any financial interest, relationship or association whatsoever with an applicant or borrower or guarantor or any other party in relation to the loan.