Bluestone Case Study

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First things first, we will address your comments regarding the requirement that accountants hold an ACL before they could provide an accountant’s letter or capacity to repay certificate to Bluestone, then with that out of the way, we will comment on what’s the best foot forward for Bluestone regarding using an accountant’s letter to verify an applicant 's financial situation.
CPA Australia’s position
The NCCP Act requires those involved in consumers obtaining credit contracts or consumer leases to have a credit licence (or have an authorisation from a credit licensee) and to comply with responsible lending requirements. Broadly, those who need to be licenced are credit providers or credit assistance providers. A credit provider provides consumer
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Regardless of whether this view is correct, members of CPA Australia is likely to act in accordance with the industry body’s guidelines.
What should Bluestone do?
Bluestone should always (1) make reasonable inquiries about an applicant’s requirements and objectives in relation to the credit contract and their financial situation, (2) take reasonable steps to verify the consumer’s financial situation, and (3) assess whether the credit contract is suitable or unsuitable for the applicant. This is in line with the 3-step process set out by ASIC in RG 209.
For requirements and objectives – examples include enquiries regarding the purpose for which the credit is sought and the benefit to the applicant, and the amount of credit needed and the timeframe for which the credit is required.
For financial situation – examples include the applicant’s current amount and source of income and the extent of any fixed expenses such as
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Against this background, it would be risky to rely solely on an accountant’s letter without also obtaining any direct source documents to enable cross checking, verification, corroboration, etc. On a related note, sole reliance on an accountant’s letter is risky as this form of documentation is more likely to be subject to fraud (as letters can be easily forged).
We are aware of lenders who allow an accountant’s letter to be used in conjunction with other supporting documents, but not on its own. Bluestone could consider requiring interim statements plus an accountant’s letter (which should meet the “reasonable” test and they are easy for an applicant to obtain), or an accountant’s letter and certified balance sheet and P&L statements. Whether Bluestone would only accept an accountant’s letter from a CPA is a decision for the business. ASIC guidelines do not reference whether an accountant is a CA or a
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