Previously, companies have provided credit to consumers on behalf of YBR under a branch agreement with YBR.
However the Australian Securities and Investments Commission (ASIC) said that under its most recent guidance, companies that engage in credit services on behalf of a credit licensee generally need to be authorised as credit representatives of the credit licensee.
YBR has directly authorised over 100 individuals working in YBR branches as credit representatives, but will also need to directly authorise corporate representatives, according to a statement from ASIC.
ASIC said it considered that “the national credit licensing framework also required YBR to authorise the companies which operate the branches.”
“This was because the companies also act as intermediaries between the licensee and the consumer,” ASIC stated.
ASIC acknowledged YBR’s cooperation on the issue and said it is “important for all credit licensees to consider carefully how each party they deal with is authorised or licensed”.
“This helps to ensure that all the parties involved in the loan application process are identified, and also strengthens access to external dispute resolution. These are both important consumer protection aspects of the regime,” ASIC stated.
YBR is now in the process of authorising the corporate entities directly under its licence, and those entities can sub-authorise employees or they can be directly appointed under YBR’s credit licence, ASIC stated.
Yellow Brick Road operates over 150 branches through a network that assists consumers to apply for credit contracts, ASIC said.
