FNS40815 Finance and Mortgage Broking : Resolution Procedures

Questions:

Short Answer Question 1
a)Which sort of loans does the National Credit Code cover?
(b)What evidence would So Sweet as a holder of an Australian Credit License be required to prove the following?
Maintaining Australian Credit License
Authorisations with aggregator. 
Mortgage brokers must complete their Continuing Professional Development points 2 months before the professional body’s due date. Note: So Sweet keep training records.
Audit loan documentation.
(c)What would you do to implement an audit of loan documentation for staff and authority holders?
(d)What statutory records does a financial services organisation need to maintain?
Short Answer Question 2
(a)How can a mortgage broker avoid perpetrating unconscionable conduct?
(b)What are the most common client complaints?
Short Answer Question 3
(a)Briefly explain the most common types of frauds perpetrated in the mortgage industry?
(b)If a client perpetuates fraud, will the mortgage broker be liable?
Short Answer Question 4
One afternoon, Millicent asks if you to Bob Butler who is one of Ying’s clients and then leaves. You invite Bob to sit down and ask him how you can help. Bob, who is 80 years old, launches into a tirade. You are able to move past his emotion and begin to determine whether there are genuine causes for what appears to be a pressing complaint. Firstly, according to Bob, Ying has failed to return his phone calls for the past two weeks. This means that Bob has been experiencing great difficulty in obtaining a refund of the brokerage fee. Bob wants a refund because Ying failed to explain the terms and conditions of the prospective loan and because she refused to answer his questions. According to Bob, when his ‘solicitor friend’ read the fine print, the loan was of an ‘interest only’ nature. Bob claims he specified that he was not interested in this kind of loan. He later found out that the other product Ying had recommended was out of date. Ying also refused to comment on the impact of an easement that appeared on the title of the property. As an aside, Bob notes an administrative error in the invoice which he considers to be irrelevant because, in his words, he has “no interest in paying an incorrect invoice for an incorrect product rendered through inadequate service by an incompetent and inept broker”.
When Bob finishes venting, you explain that Ying was in a car accident and has been on sick leave for two and a half weeks. You immediately apologise for the firm’s oversight and failure to divert her phone calls, adding that you forwarded an email to Ying only this morning so that you can guarantee her ‘out of office’ reply is active. Bob, however, is old school and uses Australia Post or fax rather than email. Believing you are making excuses for your colleague, Bob snaps back that he is “not interested in empty placations but rather workable solutions”. He stops, breathes and asks point blank, “Why am I always the mug that has to deal with idiots? What are you going to do to fix this mess?” Thankfully, at that moment, Bob’s mobile rings. He looks at the caller ID and tells you it is an important call, you offer to return in five minutes to continue the discussion.
You go straight to your office and access the ‘Credit Policies and Processes Manual’ which are available on the portal. You read the ‘Code of Conduct’ to determine what is expected of both you and Ying as financial advisers. You also search the document for two key words; ‘dispute’ and ‘complaint’. The computer does not return any hits for either word. Given the time limit, you resign yourself to having to remember basic dispute resolution protocols from last week’s in-house training session. You analyse the situation as you know it and prepare yourself to continue dealing with the complaint.
(a) 
i.Make a list of bullet points to summarise your understanding of Bob’s complaint and to remind you of the issues you need to discuss.
ii.What are the procedural requirements you and Ying need to follow under the code of conduct that are relevant to this case?
iii.What are the key issues and how are you going to address them? Consider Ying’s actions, Bob’s expectations, Bob’s and Ying’s rights, basic dispute resolution procedures, and opportunities you can develop to enhance the quality of service your firm provides.
iv.Put yourself in Bob’s shoes. How are you going to empathise with him?
v.Which follow-up questions will you ask Bob?
vi.How will you explain the relevant dispute resolution schemes, services and governing statutes in plain English?
(b)When you return to the conference room, Bob demands you give him Ying’s contact number because his complaint is with her and not with you.
i.What is your response?
ii.Which details of Bob’s complaint would you be willing to share with Ying upon her return to the office and why?
(c)Write an email to Millicent to document how you handled this matter (take a screen shot of the email to fulfil this aspect ensuring you include the email address it is being sent from). Also identify ways that you believe the office’s processes and standards can be improved as a result of the issues Bob raised.
(d)How did you monitor Bob’s level of satisfaction during your conversation? What signs did you look for to determine whether Bob left a satisfied customer?
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