Elements and Performance Criteria

RANGE STATEMENT
The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.
The role of consumer credit includes:
enabling approved applicants the ability to purchase items (goods or services) where the cost of the item exceeds current savings available.
Advantages and disadvantages of credit may include:
advantages:
can obtain and use purchased item immediately
minimises the need to carry cash or write cheques
allows for instalment payments on expensive items
convenient form of payment when travelling, especially overseas
disadvantages:
may increase cost of items purchased due to interest accrued
usually attracts other fees such as account servicing fees
can lead to compulsive buying habits
creates a false sense of wealth.
Consumer credit facilities may include:
fixed:
personal loans
lease
hire purchase
buy now, pay later schemes
revolving:
credit cards
store cards
overdraft.
Plain language refers to:
written or spoken forms of language easily understood by the listener, giving particular regard to the listener's characteristics including:
age
ethnicity
basic skills of comprehension
defining key terms and phrases, assuming little or no prior knowledge of the subject and may in some cases require the assistance of an interpreter.
Differences between unsecured and secured loans include:
a secured loan is supported by an underlying asset while an unsecured loan is not
unsecured loans attract a higher interest rate due to increased risk to the lending institution.
Implications of default on secured loans include:
repossession of the underlying asset by the lending institution
any shortfall in sale of repossessed asset against outstanding loan amount must be paid by borrower.
Fees and costs associated with different credit options may include:
account servicing fees
credit purchase fees
late payment fees
loan establishment fees
withdrawing from a foreign Automatic Teller Machine (ATM).
Ways to compare advertised interest rates may include:
informing the client of the comparison rate which includes all associated fees and charges.
Strategies to minimise fees on credit may include:
consolidating savings and credit facilities with the one institution where account servicing fees can be cancelled out
know how many free transactions come with the card
paying the minimum monthly instalment on time.
Ways to avoid credit card fraud include:
not disclosing Personal Identification Number (PIN) to anyone
selecting a PIN only the cardholder would know
signing the back of the credit card.
Implications of establishing poor credit history may include:
higher interest rate penalties
inability to obtain finance in the future
disadvantaged applications for rental accommodation
necessity to obtain guarantor in future loans.
Methods of obtaining own credit reference report may include:
writing, emailing or telephoning the relevant agency requesting a copy of one's own file, having provided relevant details to identify self

EVIDENCE GUIDE
The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit
Evidence of the ability to:
clearly explain the different types of consumer credit options currently available to clients and the associated implications and risks of the various credit schemes, as well as the implications of establishing a poor credit reference history.

Context of and specific resources for assessment
Assessment must ensure:
competency is demonstrated in the context of the financial services work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment
access to and the use of a range of common office equipment, technology, software and consumables
access to financial services product information

Method of assessment
A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:
evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency
observing processes and procedures in workplaces or role plays
verbal or written questioning on underpinning knowledge and skills
setting and reviewing workplace projects and business simulations or scenarios.

Guidance information for assessment