Licensing Torque

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Licensing Torque
Prepared for the Motor Industry Forum 3 March
2004
Fiona Smith Chairperson Business Licensing
Authority
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LMCT REGULATION MODEL

• Motor Car Traders Guarantee Fund Claims Committee
• Determines claims against the Fund

BUSINESS LICENSING AUTHORITY Determines all
licence-related applications under the Motor Car
Traders Act 1986 Maintains Register of licensed
motor car traders
CONSUMER AFFAIRS VICTORIA (CAV) Provides
information to the BLA about LMCT
applicants Monitors compliance with the Motor
Car Traders Act 1986, Fair Trading Act 1999,
conducts investigations and enforces
legislation Dispute resolution
function Business Names registration.
VICTORIA POLICE Criminal record checks and
detailed reports to BLA as and when
appropriate. Monitoring compliance,
investigations and enforcement eg second-hand
dealers, prostitution. Licensing, regulation
and disciplinary proceedings for Private Agents.
VICTORIAN CIVIL ADMINISTRATIVE TRIBUNAL
(VCAT) Hear appeals from BLA LMCT related
decisions. Hear disciplinary proceedings
initiated by CAV or Victoria Police against
LMCTs.
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Who needs a licence?

• To protect consumers, any person trading in motor
  cars must be licensed unless exempt under the
  Act.
• Trading in motor cars means to buy, sell,
  advertise or exchange motor cars, whether as the
  principal or an agent, but not as an employee.
• A person is deemed to be a motor car trader if
  they
• Buy, sell or exchange four or more motor cars in
  any 12-month period on their own behalf or as an
  agent
• In some cases, buy, sell or exchange less than
  four motor cars in a 12-month period or
• Offer to do any of the above.
• Qualifications to the deeming provisions
  section 7A

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KEY FEATURES OF BLA LICENSING PROCESS

• BLA is a statutory body independent of government
  and industry
• All licence applications dealt with on papers no
  hearing capacity
• Processes ensure procedural fairness against
  eligibility criteria
• Recommendations can be made on applications by
  CAV and Victoria Police prevention is better
  than cure
• Power to impose conditions on LMCTs but no power
  to initiate disciplinary action

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KEY FEATURES - continued

• LMCTs perpetually licensed until surrendered,
  suspended or cancelled
• Automatic cancellation provisions in the event of
  insolvency, external administration, certain
  criminal offences and failure to lodge annual
  statement and fee.
• Permission application process for otherwise
  ineligible licence applicants, salespersons,
  directors, persons concerned in the management of
  a motor car trader public interest test

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TRENDS

• Number of LMCTs remains reasonably static with
  consistent number leaving industry each year.
• Gradual decrease in number of applicants for
  licences.
• Increase in BLA imposing conditions on current
  LMCTs.
• to protect MCTGF
• greater scrutiny on financial performance

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TRENDS - continued

• Gradual increase in percentage of LMCTs trading
  as wholesalers.
• Increased numbers of enquiries about the need for
  a licence if acting as a broker.
• Increased number of women involved in LMCTs.
• Gradual increase in compliance with laws relating
  to salespersons with criminal records and claims
  against Motor Car Traders Guarantee Fund need
  for further improvement

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LMCT VITAL STATISTICS
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LMCTs Cancelled/Surrendered
Note 2003 100 surrendered, 53 cancelled due to
failure to lodge an annual statement ,
liquidations and claims on the MCTGFCC.

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Number of LMCT Applications
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Trend in LMCTs With a Wholesale
Condition 2001 2002 2003 1/2/2004 9.32 10.15
10.66 11
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Percentage of All Conditions Imposed - Upon
Current Licensees
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Gender Profile of LMCTs
As at 1 February 2004
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Permission Applications Motor Car Traders Act 1986
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WHAT MIGHT THE FUTURE HOLD?

• Greater focus on managers as associates in
  licence application process and annual statements
• Better use of BLA condition making power to
  complement enforcement activity of CAV and
  Victoria Police
• eg Key person conditions
• Consumer protection programs
• Greater co-ordination between BLA, Motor Car
  Traders Guarantee Fund Claims Committee,
  CAV/Victoria Police to maximise enforcement
  effort.

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WHAT DOES THE FUTURE HOLD? - continued

• 4. Increased attention paid to enhancing
  information and services provided to LMCTs as
  key part of consumer protection strategy
• 5. Further develop on-line licensing services for
  consumers and LMCTs
• - increased consumer interest in publicly
  available information about LMCTs

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Public Register of Motor Car Traders Available
for public inspection Details to be recorded now
specified Includes conditions, claims allowed on
Fund, all permission determinations, refused
applications in previous 2 years
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www.bla.vic.gov.au