What this means to you, the Motor Dealer:
From 11 March 2004, persons who carry on a Financial Services business or
provide advice about Extended Warranty Products in Australia are required to
hold an Australian Financial Services Licence (AFSL) pursuant to Section 911a
of the Corporations Act. An alternative to holding a AFSL is to operate as an
authorised representative of an AFSL Holder.
Carrying on a Financial Services business without an AFSL after 11 March 2004
is an offence punishable by a fine not exceeding $22,000.00 or imprisonment for
2 years or both.
The concern for your Dealership:
Companies and persons who provide advice on or sell non-compliant Extended
Warranty Products may be conducting a Financial Service business. As such, ASIC
have indicated they will be targeting all breaches of the Act.
Does your Warranty Provider need to have an AFS Licence? If in any doubt, for
your protection, obtain independent legal advice as to your position,
contact ASIC or insist that your Warranty Provider provides in writing
proof that they are acting in accordance with the Financial Services
regime.
For more information, visit:
www.asic.gov.au/fsrfaq
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