Short Answer Question 1

Explain the difference between contract law and common law?

Short Answer Question 2

What are the five key elements within the Insurance Contracts Act 1984?

Short Answer Question 3

Outline the six credit activities defined under the National Consumer Credit Protection Act 2009?

Short Answer Question 4

Outline the obligations of an ACL Licensee. Describe which penalties are prescribed in the National Consumer Credit Protection Act 2009 for Credit Licensees or Advisers who break the regulations and their obligations.

Short Answer Question 5 

You work for NATWHICHPAC BANK. Alex Kopf is a graphic designer, who worked for an advertising company before she was made redundant in June 2009. She approached your firm in September 2009 as a first home buyer with a $20,376 deposit and the dream of owning her own studio apartment. At the time she was freelancing on small and intermittent projects as she was still adjusting to being self-employed.

As far as you can remember, Alex was a pleasure to deal with during the application process. She was clear about her financial requirements, committed to her financial objectives and utterly transparent when it came to her financial position. Unfortunately, Alex’s preliminary assessment failed on the basis of her inconsistent and unreliable income. She was deemed to have inadequate funds and an inadequate buffer between her disposable income and the amount of the proposed repayments. On this basis, the bank declined to provide Alex with credit assistance.

Out of the blue, Alex contacts you to request a copy of her preliminary credit assessment. You check her file and, once again, you decline to assist on the grounds that the bank did not provide Alex with any credit assistance. By way of explanation, you quote the bank’s policy:

“We must provide you with a copy of our preliminary credit assessment of your application if you ask within seven (7) years of when we assist you. We are only required to give you a copy of the preliminary credit assessment if we give you credit assistance.”

Alex does not take kindly to your response. She highlights that she is well within the official time limit and that she is merely requesting access to information that concerns her. Regardless of the policy and the “mean-spirited control freaks” who wrote it, she maintains a moral right to access her own credit assessment. After using a string of choice phrases to describe the policy and its makers, she informs you that she intends to escalate her complaint.

You encourage her to explore her options and to use the complaints resolution procedures that were included in her information pack. She mutters to herself that you have never helped her in the past and that it is naïve to think that you would start doing so now. Angered by her past experiences, she snaps back that only someone with a pathological hoarding problem would hold onto procedural literature relating to an application that was rejected.

Activities:

a) Explain to Alex the standard procedures for resolving complaints internally and externally. Point out why the details are included in the client information packs and how she can access information on the complaints resolution process.

b) How would you maintain communication channels when dealing with Alex’s complaint?

c) How would you maintain communication channels following the complaint handling procedures?

d) How would you exercise restraint when dealing with this conflict situation? Which feelings would you have to control as a result of Alex’s language and emotions?

e) Which industry regulations and codes of practice would you have to interpret and comply with in relation to this complaint? Explain.