Document Execution, are you at risk?

31 August 2023

Just recently in Canada, a court ruled that the “thumbs up” emoji was enough to signal a contractual acceptance.

Interestingly, we have also seen an increasing number of enquiries from brokers around their ability to execute premium funding applications on behalf of customers, a practice which some funders are reportedly accepting.

Premium funding loan contracts however are somewhat more complicated than a simple product sale - and brokers should be aware that for loan applications, there are significant risks with completing the premium funding loan application in place of the customer, with digital documents still as binding as a physical signature.

We have engaged with Brand Partners (Commercial Lawyers) – who have been acting in the premium funding industry since 1993 – in order to provide a more thorough response to the questions around execution of premium funding applications. Their Alert on Broker’s Overriding Obligations outlines two relevant sections of the Corporations Act 2001 that a broker should be aware of.

Get in contact with your Hunter Account Manager to get a copy of the Brand Partners (Commercial Lawyers) alert on ‘A Broker’s Overriding Obligations (Premium Funding Applications)’.

We have also answered the three most commonly asked questions below:

Only where a rollover authority exists, on a prior loan application executed by the client. If it is the first time the customer is accepting a premium funding contract, or there is no rollover authority in place for you as their intermediary, the customer must execute the documents themselves.
Even with verbal or written instruction (outside of a legally binding Power of Attorney) you still do not have the appropriate authority to accept the terms and conditions of the loan application on your customers’ behalf, or commit them to a direct debit or credit card arrangement using their financial information.

It is very clear that there are risks to all parties in executing documents on behalf of customers where appropriate authority is not in place, and they have not had an opportunity to review and understand all of the terms and conditions of the facility.

Hunter is committed to sustainable industry practices that bring the best of our product to brokers and customers.

Our digital quote processes mean loan applications are easy, fast and efficiently approved, allowing ample time to do things correctly.

If you need any further information on our quote processes and how to make the most of our digital execution options, please contact your Hunter Account Manager.

The information contained within this article is of a general nature. While all reasonable care has been taken, Hunter Premium Funding accepts no responsibility for any loss, expense, or liability which you may incur from using or relying on this information.
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