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Personal Loan Target Market Determination

Last updated 20 June, 2022

Issuer

Alex Bank Pty Ltd ABN 13 627 244 848, Australian Financial Services Licence and Australian Credit Licence 510805 (Alex, We, Us or Our).

Target Market

This Target Market Determination (TMD) sets out the target market for our Personal Loan product.

Product Description and Key Attributes

The Personal Loan product key attributes will impact whether it is likely to be appropriate for the target market include:

  • a 100% digital online application process;
  • no establishment or application fees;
  • no monthly fees;
  • flexible repayment frequency;
  • flexible loan term;
  • fixed interest rate; and
  • no fees for extra repayments or paying the loan off early.
Description of objectives, needs and financial situation

This product is appropriate for a customer who is seeking a personal loan for a range of life events and expenses, such as:

  • Renovations;
  • Buying a motor vehicle or sport or recreational vehicle;
  • Home improvements;
  • Debt consolidations;
  • Holidays;
  • Studying; and
  • Medical.

We will make reasonable enquiries about the customer's requirements and objectives. However, we recommend the customer consider whether their objectives and requirements align with the features and suitability of the product.

We will also make reasonable enquiries about the customer's financial situation. To assess whether the loan is affordable to the customer, we will consider the customer's employment, income, living expenses, automotive expenses, discretionary expenses, other debts, credit history, specific life events, temporary difficulties and any information that will assist us to understand the customer's full financial position.

This product is not suitable for a customer that:

  • wants a variable interest rate;
  • requires redraws or loan splits;
  • requires a personal loan in joint names;
  • requires a personal loan with the following purposes:
    • General spending (no specified purpose);
    • Gambling;
    • Investment in residential or commercial property or small business or shares;
    • Outstanding generic bills, Centrelink debt, tax bills, legal bills or small amount credit contracts and buy now pay later arrangements.

The Alex Personal Loan product is subject to our Lending Policy.

Description of Customer Profile
  • This product is only available to customers that meet Alex identification requirements and are:
    • 18 years or older;
    • An Australian Citizen or Australian Permanent Resident with the ability to provide Alex with a valid Australian issued Photo ID (Passport or Drivers Licence);
    • Residing in Australia at the time of the application;
    • Not over 65 years of age (unless we receive a satisfactory loan repayment proposal); and
    • Able to demonstrate the capacity to make required repayments on the credit facility without substantial hardship.
  • The product is appropriate for the target market on the basis that the key attributes of the product as set out in this determination directly address the objectives, financial situation and needs of consumers in the target market.

Distribution Conditions

  • We have placed conditions and restrictions on the distribution of the product to ensure it is distributed to customers within the target market.
  • We have designed this product to be distributed by:
    • visiting our website https://www.alex.bank;
    • contacting our representatives or affiliate partners directly; or
    • contacting our authorised brokers.
  • This product is only marketed and promoted through advertising on the internet (including social media) and other marketing material available to the general public and in person recommendations. This condition is appropriate as the target market is wide.
  • To further ensure the product is distributed to customers in the target market, we have:
    • implemented targeted advertising;
    • provided specific content about the product on our website that is consistent with this TMD;
    • ensured our representatives are adequately trained to understand the customers this product has been designed for; and
    • provided guidance to our brokers and affiliate partners.
  • We have taken steps to ensure that our remuneration and incentive structures for this product do not result in distribution that is inconsistent with the TMD.
  • We supervise the distribution of the product through monitoring the process of each application and collecting any relevant data. We will provide sufficient information to our brokers and affiliate partners to assist them with meeting their obligations to ensure distribution of the product is consistent with this TMD.
  • If we become aware that the distribution conditions are inadequate, where for example, significant distribution is occurring outside the target market, Alex will undertake a review of this TMD.

Review Triggers

  • The events or circumstances (called 'review triggers') that would reasonably suggest that the TMD is no longer appropriate and would trigger its review are:
    • invitations made to customers from outside the target market;
    • significant dealings - a material pattern of dealings in the product or distribution conduct appears that is not consistent with the determination;
    • a material change to the product, including introduction of promotional features;
    • a significant increase in events of defaults;
    • a material change in law or regulatory guidance;
    • reporting from representatives or brokers that suggests part or all of the TMD is no longer appropriate;
    • internal complaints or notice of complaints made to Australian Financial Complaints Authority considering the nature of complaints and complaint trends;
    • the nature of complaints and complaint trends;
    • a notification from the Australian Securities and Investments Commission (ASIC) requiring immediate cessation of the product or particular conduct in relation to the product.

We will review this TMD within 10 business days if we know or reasonably know, that a review trigger has occurred.

Review Periods

Next Review Date: 20 June 2023

  • Periodic Review: Subsequent periodic reviews will occur at least annually.
  • We will also review this TMD in response to any review triggers or other events or circumstances that would reasonably suggest that this TMD is no longer appropriate.
  • Where we become aware of information that would reasonably suggest that this TMD is no longer appropriate, Alex will undertake a review of this TMD.
  • We will notify the Australian Securities and Investments Commission (ASIC) within 10 business days of us becoming aware of a significant dealing in the product that is not consistent with this TMD.
  • We will integrate the review process into our product governance arrangements, and controls will be put in place to ensure that meaningful reviews take place. Possible outcomes from the review process include:
    • no change to the way the product is distributed; or
    • changing the product design, target market or distribution.

Distribution Information Reporting Requirements

  • We understand complaints, events of defaults and general feedback about the product are useful indicators of whether this TMD is still appropriate.
  • Where Alex engages external representatives to distribute this product, we require that they promptly provide us with information in relation to any complaints and general feedback received, to allow us to review this TMD.
  • Our external representatives are required to provide the following information:

Type of Information

Description

Reporting Period

Complaint

The following information is required:

  1. Representative name
  2. Date of complaint
  3. Product
  4. Nature of the complaint
  5. AFCA status (if applicable)

As soon as practicable, and in any case within 10 business days after becoming aware.

Significant Dealings

Information about any significant dealing in the product that is inconsistent with the target market determination of which the intermediary becomes aware.

As soon as practicable, and in any case within 10 business days after becoming aware.

Broker Feedback

Information discovered or held by the intermediary that suggests that the determination may no longer be appropriate.

As soon as practicable, and in any case within 10 business days after becoming aware.

Other Information Requested

The representative must provide the information by the date requested by Alex.

As soon as practicable, and in any case within 10 business days after the request.