Member ‘Code of Conduct’
What is a Code of Professional Conduct?
It is a document setting out the principle dealing with industry practices all members of Vendor Finance Association (VFA) agree to uphold. Its purpose is to set a standard of good practice and fair dealing between VFA members and consumers. It is not a part of any legislation or Act of Parliament. However, it is binding on all VFA members. It is an evolving document that, over time, will be reviewed and amended to keep pace with changes in the industry and consumer needs.
VFA Code of Conduct
Membership Disclosure and Representation
- Members agree they are able to display VFA logo on all documentation as proof of membership.
- Members agree to the VFA providing verification of membership to consumers within a reasonable time of receiving the request in writing
- A member may only claim membership of the VFA if their current membership fee has been paid and they comply with the Code of Conduct.
- Any member whose membership has been cancelled shall immediately cease using the logo.
- Members agree to allow the Association to reveal the status of a membership.
Trust and Integrity
VFA members agree:
- To use their best endeavours to ensure they do not act in a fraudulent or unfair manner or bring discredit to the Association or the Vendor Finance Industry.
- To at all time act in a professional manner so as to neither offend nor bring discredit to the Association or the Vendor Finance industry.
- Not to discriminate against any person on the grounds of race, religion, sex, sexuality, physical appearance or disability when dealing with potential or existing clients.
- To comply at all times with all applicable Federal, State or Territory consumer laws and anti-discrimination and equal opportunity laws. Should a member become aware of a potential or actual breach, the member will take all reasonable action necessary to effect compliance and restoration in a timely and efficient manner.
- To not make any claim, inference or promise to a potential client that they will be successful in their application to purchase a property from the member unless there is a genuine and reasonable expectation of this eventuating.
- To not make any false, misleading, dishonest or deceptive statements through any form of advertising, promotion or dissemination of information about themselves, their business, the VFA or the Vendor Finance industry in general.
- To ensure they fulfil all the terms and conditions of any underlying loans on a property being offered or sold under a Vendor Finance contract.
- The member will take all reasonable action necessary, if a member becomes aware
of any financial difficulty that may adversely impact any Vendor Finance agreement that they have entered into.
Disclosure and fair practices
- Prior to entering into any VF agreement or understanding, Members shall disclose to potential clients, investors and other interested parties that the VFA maintains records of membership status which are available to all members of the public free of charge.
- Members shall be open and transparent in disclosing all information to the buyer as may be required under relevant State or Federal laws and shall take reasonable steps to ensure that the information provided is accurate at the time it is provided.
Members shall make a potential buyer aware of the following details prior to entering into a contract:
- the interest rate to be charged
- the difference between that rate and the rate paid by the vendor
- any fees and charges
- the amount of outgoings payable on the property; and
- That the purchase price is fixed and cannot be increased by the Vendor during the term of the contract.
- The payments that are required and how they are calculated
- The consequences of late payment
- The consequences of non payment(default and termination)
- The purchaser’s obligation to pay for rates, insurance, and the maintenance
of the property.
- Members shall provide a written recommendation to all potential buyers to obtain independent legal and/or financial advice prior to signing any contractual agreement and shall allow the potential buyer a reasonable time frame to secure
such advice. The Association accepts that some buyers may elect not to seek such advice in which case the buyer will be requested to provide the member with advice in writing that the buyer has chosen not to obtain such independent advice.
- Members shall not include in the contract of sale or VF agreement any clause or condition that is be harsh, unfair, and unreasonable or where there is little or no chance of the buyer being able to fulfil it.
- Members shall take reasonable steps to ascertain the buyer’s financial position andcapacity to meet the financial commitment and other terms of the contract.
- Members shall not charge any fees or pass on any costs to a buyer that has not been fully disclosed in the vendor finance agreement. A written schedule of costs shall be supplied to the buyer in advance of commencing a vendor finance
agreement and shall form part of the agreement documentation.
Handling Defaults, Arrears and Breach of Contract
- Members recognise that from time to time, buyers may get into arrears or be in breach of contract for a variety of reasons and in some instances, it may be due to events outside the buyer’s control.
- Members agree to assess each instance and/or case on its own merit and give the buyer a fair and reasonable hearing before deciding on action to be taken.
- Members agree that evicting a buyer or forced sale of the property should only be a remedy of last resort and used when all reasonable avenues for resolving the situation are exhausted or where allowing the situation to continue would reasonably have an adverse impact on the resale value of the property or continuation would only serve to worsen the buyer’s financial situation.
- Where a vendor finance agreement is terminated, members will procure an assessment of the value of the property and determine whether there is, after allowing for principal owing, interest, costs and other expenses that may be levied under the vendor finance agreement, any surplus due to the buyer. Where there is such a surplus the member will account to the buyer for the surplus in accordance with the terms of the vendor finance agreement.
- Shall maintain the trust of clients, and fidelity concerning the business or personal affairs of a client who may reveal confidential, private and/or financial information.
- Shall not disclose what may be considered private information about other members or clients (current past or potential), without the parties express consent to do so.
- Shall take reasonable steps to ensure the security and confidentiality of all their clients records are maintained in accordance with relevant Privacy legislation