Reply: 1.1.1.2.1.1.1
From: Mike .
Hi Folks,
There are 3 paragraphs causing the confusion. So let's take them one at a time.
1)
Section 6 (1) of the Credit (Administration) Act 1984 states;
"Subject to this Act, a person shall not carry on a business of providing credit unless the person is the holder of a credit provider's licence."
Paragraph 1 is an extract from the Act. It is a general statement only because it doesn't describe what businesses require a license. However, other sections of the Act do. Did you know that Banks and Building Societies don't require a credit provider's license? The Act does not mention the words "wrap" or "vendor" anywhere.
2)
If a person is not carrying on a business of providing "wrapping or vendor finance", then they are not required to be the holder of a credit provider's licence.
This is Stuart Dowling's comment and a rather silly one because it is self-evident that if you don't provide credit you don't need a license. However, the opposite is not necessarily correct either. As I pointed out above that only certain types of businesses require a license.
3)
I regret to advise that as this type of finance is unregulated, the Ministry of Fair Trading does not have any Business Notes pertaining to this type of finance.
Sad, sad, sad...Stuart has thrown this in the "too hard basket" because he can't reference my enquiry to their Business Notes which are available online.
Summing up, it appears Stuart only did a cursory amount of research and his comments appear to be of a "cautionary" nature, only.
Please go to this site for the FACTS:
http://www.creditcode.gov.au
Read eveything, including the CODE PRINCIPLES AND ADMINISTRATION at
http://www.creditcode.gov.au/dload/princip.doc
You will discover that the Consumer Credit (Queensland) Act 1994
CONSUMER CREDIT CODE
is the template used by all states except WA.
I did find some references in the QLD Act to instalment contracts which is causing confusion amongst wrappers who are using instalment contracts for their wraps but my interpretation is that instalment contracts are only covered by the Act if they are used in purchasing household goods and services. There is no reference in the Act to instalment contracts being used to purchase property.
If you are using the Lease Option method then there is no doubt that a credit providers license is not required.
Try Lewis O'Brien at
http://www.freelawyer.com.au He may know something about WA.
Also try Jeff, email:
[email protected]
He is an industrial lawyer interested in researching wraps in WA. He may know more about it.
At the end of the day you need a solicitor to draw up all the legal documents you require to do wraps. Most solicitors haven't heard of wraps so the first hurdle is to describe the concept to them and then they need to see if and how it can be done in their state. If you can't find someone then take the lease option route although the FHOG won't be available until the option is exercised.
Regards, Mike