The increasing use of offshore staff, marketing agencies, virtual assistants, appointment setters, and lead-generation companies within the mortgage industry has created a significant and often poorly understood area of regulatory exposure under Australian credit law. This article looks at the legality of the process.
Many broker businesses have adopted outsourced customer acquisition structures in which the initial consumer interaction no longer occurs with a licensed broker or authorised credit representative, but instead with a third-party operator whose role is ostensibly administrative or marketing-oriented. While these arrangements are frequently justified as operationally efficient, the legal distinction between administrative support and regulated credit activity is far narrower than many businesses appreciate. The issue is not determined by job title or contractual characterisation, but by the substance of the interaction itself. Once a non-licensed party begins engaging in conduct that influences, assesses, or guides a consumer in relation to a credit product, the conversation may move beyond marketing and into the realm of regulated credit activity under Australian law. The problem? The 'simple' recommendation passed onto a broker based on any early unlicenced assessment is objectively and lawfully viewed as 'advice', so the first conversation is not compliant.
The BM Service: It needs to be understood that we will often engage in this style of service - mainly as it relates to our managed client groups (where we introduce up to 30m a month and provide backend support). The difference? We are were brokers, so we'll become short-term credit representatives for the purpose of the process. That said, we still don't provide advice, nor do we make assessments - we simply provide the layered protection as a shield against the potential legal exposure. What we're introducing this article is unlicenced individuals for the initial phone contact. We ceased providing backend calls as a 'general' service in 2019 as a result of compliance concerns.
Project Green Line: We recently engaged with over 100 incoming phone calls from third-party 'call setters' in order to investigate the practice. In each case, the female that took the call - via throwaway and temporary VoIP mobile numbers - was instructed to converse via a set of established parameters. We expected to assess the legal structure of the call, but it turned out that the performance of the caller was more relevant - in over half of the cases, we were instructed that we "weren't eligible" or "didn't quality" when every single scenario was developed as a potential deal. The call setters - commercially presented as a means to improve efficiency in the appointment funnel - actually lost over 35% of all deals. We're unable to release the calls because of privacy legislation but we'll likely publish full call summaries. In each case, an unlicenced marketing stooge essentially 'qualified' us on the basis of a conversation that was clearly prohibited by legislation. Almost all calls included advice from somebody that no substanional knowledge.
The central legislative framework governing this area is the National Consumer Credit Protection Act 2009 (Cth), which establishes Australia's consumer credit licensing regime. Section 29 of the Act provides that a person must not engage in a credit activity without the appropriate licence or authorisation. The provision states:
National Consumer Credit Protection Act 2009 (Cth), Section 29: “A person must not engage in a credit activity if the person is not: (a) the holder of a licence that covers the credit activity; or (b) a representative of another person who is the holder of a licence that covers the credit activity".
The significance of this provision lies in the breadth of the concept of "credit activity". The regulatory framework does not merely capture the final act of recommending a loan product. Rather, it extends to conduct involving "credit assistance", intermediary activity, and participation in the consumer credit acquisition process. Section 8 of the Act relevantly provides:
National Consumer Credit Protection Act 2009 (Cth), Section 8: “A person provides credit assistance to a consumer if, by dealing directly with the consumer or the consumer's agent in the course of, as part of, or incidentally to, a business carried on in this jurisdiction by the person, the person: (a) suggests that the consumer apply, or remain in, a particular credit contract with a particular credit provider; or (b) suggests that the consumer apply for an increase to the credit limit of a particular credit contract with a particular credit provider; or (c) assists the consumer to apply for a particular credit contract with a particular credit provider.”
The language used by the legislation is intentionally broad. Importantly, the statutory concept of "suggesting" or "assisting" is capable of encompassing a wide range of conduct that may occur long before a formal loan recommendation is ever made. This becomes particularly significant in modern mortgage lead-generation environments where consumers are commonly funnelled through preliminary "qualification" or "fact find" calls before ever speaking to a licensed broker. If a marketing company, offshore administrator, or appointment setter begins assessing income, liabilities, credit position, serviceability, loan purpose, or lender suitability, the interaction may begin resembling regulated credit assistance rather than mere administrative coordination.
This issue becomes even more acute where the third party engages in what may be described as pre-assessment behaviour (the purpose of the call). Statements such as "you appear eligible", "you would likely qualify", "this lender may suit your position", or "you look like a good candidate for refinancing" are not merely conversational observations... and this was common language in our little experiment. This language may constitute representations concerning credit suitability or implicit product recommendation activity. The legal risk arises because consumers generally interpret these statements as professionally informed lending guidance rather than neutral administrative commentary. From the perspective of consumer psychology, the distinction between an “appointment setter” and a broker is often invisible to the ordinary borrower. Consumers frequently assume that any individual collecting detailed financial information on behalf of a mortgage business possesses some degree of expertise, authority, or representative capacity. Consequently, preliminary interactions may materially shape borrower expectations and decision-making before a licensed broker becomes directly involved.
Offshore Telemarketing: We've recorded several hundred phone calls originating from offshore call centres associated with lead generation services and onshore brokerages. To escape early scrutiny, the callers will often identify as a fake or reputable brokerage before details are referred to a local broker. We routinely take these calls and trace them back to the broker source. We expected to release our #finspam documentary in 2025 but are currently challenging a group that are preventing distribution by way of a costly legal process (this may be resolved quite soon on the basis of the malfeasance exposed via mainstream media). When data suggests that over 90% of all mortgage fraud is associated with largely unregulated offshore processing centres, the usage of Philippine or other offshore call facilities has to be questioned. Certainly, most of the data breaches currently made available on the dark web are not sourced via system vulnerabilities, but simple data theft.
The legal exposure does not end with the third-party operator itself. Australian regulatory doctrine increasingly focuses upon organisational responsibility for outsourced conduct. A broker or licensee cannot necessarily avoid liability by outsourcing the initial stages of the customer acquisition process to an external marketing entity or offshore call centre. ASIC has repeatedly emphasised the importance of supervision, competence, organisational controls, and oversight mechanisms within licensed credit businesses... and our experience exposes repeated transactions that would absolutely not withstand compliance or regulatory scrutiny. If an outsourced provider operates as part of the broker's consumer acquisition architecture, regulators may examine scripts, qualification criteria, remuneration structures, CRM workflows, recorded calls, and internal training materials to determine whether the outsourced party is effectively participating in regulated credit activity.
The interaction between these arrangements and the Privacy Act 1988 (Cth) also creates substantial compliance complexity. Mortgage qualification calls frequently involve the collection of highly sensitive financial information, including income, liabilities, mortgage balances, property values, repayment history, and credit position. Under Australian Privacy Principle 3, an organisation must not collect personal information unless the information is reasonably necessary for one or more of the entity's functions or activities. The APP relevantly provides:
Privacy Act 1988 (Cth), Australian Privacy Principle 3: “An APP entity must not collect personal information unless the information is reasonably necessary for one or more of the entity's functions or activities".
This requirement becomes legally significant where financial information is collected before any genuine credit assessment occurs or where the consumer is unaware that they are speaking with a non-licensed marketing intermediary rather than a qualified broker. Questions may arise regarding whether the information was reasonably necessary at the point of collection, whether the consumer possessed sufficient awareness of the purpose of the collection, and whether offshore disclosure obligations were properly satisfied. Where consumers believe they are engaging with a licensed lending professional but are in fact interacting with a lead-generation operator, additional concerns may emerge under misleading conduct provisions contained within both the Australian Consumer Law and the ASIC Act 2001 (Cth).
Section 12DA of the ASIC Act provides:
ASIC Act, Section 12DA: “A person must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or deceptive or is likely to mislead or deceive" - something we refer to as the Foundational Prohibition.
This provision is particularly relevant where the structure of the customer interaction creates a misleading impression regarding the expertise, role, authority, or function of the individual engaging with the consumer. In practical terms, consumers often infer professional competence merely from the fact that detailed financial questions are being asked. The more sophisticated the questioning process becomes, the stronger the implication that some form of suitability assessment or lending analysis is occurring.
At a broader level, the regulatory concern surrounding outsourced mortgage acquisition reflects a deeper transformation occurring within financial services marketing. Historically, the regulated interaction occurred primarily at the point of formal credit recommendation. Modern digital marketing ecosystems, however, increasingly influence consumers much earlier in the acquisition journey through stupid quizzes, "eligibility checks", appointment qualification funnels, AI-driven assessments, behavioural targeting, and pre-screening processes. Regulators are therefore examining not merely the final loan recommendation, but the entire architecture of persuasion and influence leading up to it. The legal question is no longer confined to whether the final product recommendation complied with responsible lending obligations; it increasingly encompasses whether consumers were guided, assessed, filtered, or influenced by unlicensed parties during the preliminary stages of the engagement process.
Ultimately, the use of offshore staff or marketing personnel within mortgage businesses is not inherently unlawful. Many forms of genuinely administrative support may lawfully exist within an appropriately supervised framework. However, the moment those interactions begin moving beyond clerical coordination and into the territory of borrower assessment, suitability analysis, or product guidance, the legal landscape changes materially. Australian credit law focuses on substance rather than labels. A business cannot avoid regulatory obligations merely by describing an interaction as “marketing” if the practical effect of the interaction is to guide consumers toward particular lending outcomes. As ASIC continues expanding its scrutiny of digital acquisition funnels and behavioural marketing structures, the distinction between administration and regulated credit conduct is likely to become one of the most important compliance issues confronting the modern mortgage industry.
Given that the purpose of the call is to establish suitability or eligibility (a "yes" or "no" implicitly suggests the recommendation is made), the 'call setting' experience itself is inherently flawed. Call setters introduce unnecessary legal exposure outside your immediate compliance framework, and the transaction sits outside your quality-controlled mechanisms. Based on our investigation, we'd highly recommend against it. If you currently engage in this practice, it's likely you're in breach.
