A new finance industry code of practice has come into force that brings premium funders and other non-bank and specialist lenders under a single framework. 

The Australian Finance Industry Association (AFIA) says the code establishes clear and consistent standards for customers across a diverse range of consumer and business finance products. 

“At a time of heightened global and economic uncertainty, persistent cost pressures and accelerating technological change, Australians need confidence in the financial system and the organisations they rely on for finance,” CEO Diane Tate said. 

“That confidence cannot be taken for granted. It is earned through clear standards, responsible decisions and consistent conduct, particularly when customers are under pressure or circumstances are difficult.” 

The insurance premium funding sector’s first code of practice took effect in October 2022 and was updated last year. 

The new Finance Industry Code of Practice includes overall obligations across the broader industry plus detailed standards for sub-sectors including consumer financing, novated leasing, small business finance, low-cost credit contracts and premium funding. 

Commitments cover communication, support for customers experiencing financial hardship or vulnerability, protection from scams and financial abuse, cybersecurity, responsible use of technology and artificial intelligence, and complaint and dispute handling. 

Ms Tate says in a video on the AFIA website that increasingly government and regulators are calling on industry to make sure codes of practice fill the gap between laws and regulation and customer and community expectations. 

The sector is being proactive and “not sitting back and waiting for policy makers and regulators to step in and tell us what to do”, she says. 

“We are making sure we build industry standards around our good industry practices, get ahead of customer expectations and deliver good customer outcomes and importantly minimise our legal, regulatory, commercial and reputational risks.” 

The code will be monitored by an independent five-member compliance committee chaired by Tim Grimwade. 

“We look forward to working with AFIA code members in improving standards across the industry and providing better outcomes for customers,” he said.