Are you engaging in credit activities without a licence?

If an adviser is giving generic advice relating to credit, no credit licence is required.  However, if the adviser suggests or assists a “consumer” in relation to a specific contract from a specific credit provider (including suggesting that the "consumer" remain in a particular contract), then a credit licence is required. 

A “consumer” is a natural person or strata corporation.

See below for a link to Regulatory Guide 203 Do I need a credit licence? (RG 203). 

The National Credit Act only applies to credit that is:

(a)   provided to a natural person or strata corporation; and

(b)   is provided or intended to be provided wholly or predominantly:

(i)                  for personal, domestic or household purposes; or

(ii)                to purchase, renovate or improve residential property for investment purposes; or

(iii)               refinance credit that has been provided wholly or predominantly to purchase, renovate or improve residential property for investment purposes; and

(c)   a charge is or may be made for providing credit; and

(d)   the credit is provided in the course of carrying on a business of providing credit in Australia or as part of, or incidentally to, any other business carried on in Australia.

Lending to a company or trust or superfund is not governed by the Credit Act even if the Trustee is a natural person.  In addition if the lending to a “consumer” is for business or investment purposes it is not regulated by the Credit Act unless it is for the purchase of residential property or to refinance such a purchase.