This Target Market Determination (TMD) has been prepared for etika Australia Pty Ltd ACN629 009 025 (etika) and its related businesses in Australia, as required by and in accordance with the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019, and other relevant laws and regulations. These laws and regulations aim to ensure a consumer-centric approach to designing and distributing financial products.
This TMD sets out the class of consumers for which etika’s products have been designed, the product distribution conditions and any events or circumstances that would trigger a review of the TMD.
This document is general in nature and is not intended to be a full summary of each product’s terms and conditions and should not be construed as financial advice. Consumers interested in etika’s products should refer to the product’s terms and conditions to ensure that it is appropriate for their particular objectives, financial situation and needs.
Target Market
a. Class of consumers that fall within etika’s target market (consumer eligibility requirements)
etika’s products are designed for consumers who:
- are 18 years of age or over;
- are Australian citizens and permanent residents;
- are in a financial situation which meets etika’s credit risk assessment criteria;
- have been properly identified in accordance with applicable AML/CTF rules; and
- are capable of entering into a legally binding contract or have a support person with a Power of Attorney that can speak on behalf of the customer.
b. Excluded class of consumers:
Consumers who:
- do not meet each and all of the eligibility requirements outlined above;
- are below the age of 18;
- require a financial product with an unrestricted spending limit;
- do not feel comfortable entering into a legally binding contract;
- have low levels of literacy (including but not limited to financial literacy and technological literacy, if there is no offline product available);
- have other vulnerabilities which require specialised assistance which is not present at the time of the application either through a support person, retailer support or etika’s customer service team (including cognitive impairment and mental capacity limitations);
- are experiencing financial difficulty or require direct financial and budgeting advice;
- have irregular or variable income and therefore may find it difficult to meet the set repayment schedule; and
- can or might feel pressured to make a purchase by a retailer and are not sure about the suitability of a product / service to them.
c. Needs & objectives:
etika’s products are designed for consumers who are seeking to pay for products and/or services on an instalment basis either with a fixed termination date or maintain a revolving facility in the form of a continuing credit agreement.
Each consumer application has its own real-time assessment where the available lending amount and term of finance is carefully selected and agreed upon under etika’s product and credit risk assessment criteria. The terms & conditions and repayment schedules for each product are referenced and/or outlined during the application process and are always provided to consumers at the time of approval of a finance application.
d. Appropriateness:
Each product has been designed for consumers whose likely objectives, financial situation and needs align with the product or service that they are seeking to purchase. While etika’s target market is relatively broad, each product is likely to be appropriate for these consumers because they are aimed to assist with the purchase of product(s) and/or service(s) wanted or needed in a reasonable and affordable way. etika is committed to ethical practices and takes great care to ensure that its products, processes, merchants and partners support its consumers.
Description of etika products
Interest and Fee Free Consumer Finance (Loan Agreement)
Product features:
- interest and fee free consumer loans;
- finance terms of up to 60 months for unsecured loan contracts;
- instalment payments can be made either weekly, fortnightly, or monthly;
- have a pre-set and fixed loan repayment schedule and term;
- consumers should be able to pay a deposit for an order immediately, when required; and
- variable spending limits based on etika’s risk assessment.
This product is designed for consumers who:
- meet etika’s key eligibility requirements (refer above);
- have a valid email address and Australian mobile number;
- have been properly identified in accordance with applicable AML/CTF rules;
- have a financial situation which meets etika’s credit risk assessment criteria and have the capacity to meet their financial obligations for the duration of the loan;
- desire a loan to purchase goods or personal services either through or from etika’s merchant partner(s) where this product is offered;
- desire a loan without interest and fees;
- desire the flexibility to spread repayments for purchases up to 60 months;
- are comfortable using a digital only product; and
- declare that at the time of application, they can service the principal balance of the loan and do not anticipate any material change to their financial situation.
Interest and Fee Free Consumer Finance - Offline Applications (Loan Agreement)
This Product ceased being offered from 3rd July 2023
Product features:
- interest and fee free consumer loans;
- finance terms of up to 60 months for unsecured loan contracts;
- instalment payments can be made either weekly, fortnightly, or monthly;
- have a pre-set and fixed loan repayment schedule and term;
- consumers should be able to pay a deposit for an order immediately, when required; and
- variable spending limits based on etika’s risk assessment.
This product is designed for consumers who:
- meet etika’s key eligibility requirements (refer above);
- do not have an email account and/or Australian mobile phone, but do have a residential/postal address (for the purpose of receiving communications and correspondence by mail) and a valid landline phone number;
- have been properly identified in accordance with applicable AML/CTF rules as and when required;
- have a financial situation which meets etika’s credit risk assessment criteria and have the capacity to meet their financial obligations for the duration of the loan;
- desire a loan to purchase goods or personal services either through or from etika’s merchant partner(s) where this product is offered;
- desire a loan without interest and fees;
- desire the flexibility to spread repayments for purchases up to 60 months; and
- declare that at the time of application, they can service the principal balance of the loan and do not anticipate any material change to their financial situation.
Interest and Fee Free Consumer Finance with Co-Contribution (Loan Agreement)
Product features:
- interest and fee free consumer loans;
- up to 60 months for unsecured loan contracts; and
- where the monthly instalment amount depends on the co-contribution of etika’s partner.
This product feature is designed for consumers who:
- meet etika’s key eligibility requirements (refer above);
- have a valid email address and Australian mobile number;
- have been properly identified in accordance with applicable AML/CTF rules;
- have a financial situation which meets etika credit risk assessment criteria and have the capacity to meet the variable financial obligations for the duration of the loan;
- wish to participate in the partner benefit programme for the purpose of acquiring a good or service with etika’s finance;
- are eligible for and take part in a partner benefit programme;
- understand the requirements of their participation in the partner benefit programme and the associated variable financial obligations;
- are comfortable using a digital only product; and
- declare that at the time of application, they can service the principal balance of the loan and do not anticipate any material change to their financial situation.
Continuing Credit Facility - Interest Free Finance with a Monthly Service Charge (Continuing Credit Agreement)
Product features:
- an interest free Continuing Credit Facility accessed through and comprised of one or multiple Continuing Credit Agreements which each represent individual loans/purchases;
- a $10.00 monthly service charge will be charged until the customer has repaid back the full Continuing Credit Facility balance (potentially made up of multiple loans/purchases made under Continuing Credit Agreements);
- a consumer may transact on an ongoing basis up to their Continuing Credit Facility limit, subject to etika’s Continuing Credit Agreement Terms & Conditions;
- each new loan/purchase application under the Continuing Credit Agreement will be assessed based on etika’s credit risk assessment criteria and may be subject to an additional credit check;
- the Continuing Credit Facility will be available until the customer notifies etika that they wish to close their facility;
- Scheduled repayments for purchases may be made either weekly, fortnightly, or monthly;
- each loan/purchase under the Credit Agreement will have a pre-set repayment profile;
- consumers should be able to pay a deposit for an order immediately, when required; and
- variable Continuing Credit Facility limits available based on etika’s credit risk assessment of individual consumer applications.
This product feature is designed for consumers who:
- meet etika’s key eligibility requirements (refer above);
- have a valid email address and Australian mobile number;
- have been properly identified in accordance with applicable AML/CTF rules as and when required;
- have a financial situation which meets etika’s credit risk assessment criteria and have the capacity to meet their financial obligations throughout the duration of the Continuing Credit Facility remaining open/active;
- desire a financial product, being one or multiple Continuing Credit Agreement(s) which comprise a Continuing Credit Facility, that allows them to use the facility limit to make multiple drawdowns/purchases either through or from etika’s merchant partner(s) where this product is offered;
- desire the flexibility to spread repayments for purchases up to 60 months;
- are comfortable using a digital only product; and
- declare that at the time of application, they can service the principal balance of the loan and the $10.00 monthly Service Charge and do not anticipate any material change to their financial situation.
Continuing Credit Facility - Interest Free Finance with a Monthly Service Charge - Offline Applications (Continuing Credit Agreement)
Product features:
- an interest free Continuing Credit Facility accessed through and comprised of one or multiple Continuing Credit Agreements which each represent individual loans/purchases;
- a $10.00 monthly service charge will be charged until the customer has repaid back the full Continuing Credit Facility balance (potentially made up of multiple loans/purchases made under Continuing Credit Agreements);
- a consumer may transact on an ongoing basis up to their Continuing Credit Facility limit, subject to etika’s Continuing Credit Agreement Terms & Conditions;
- each new loan/purchase application under the Continuing Credit Agreement will be assessed based on etika’s credit risk assessment criteria and may be subject to an additional credit check;
- the Continuing Credit Facility will be available until the customer notifies etika that they wish to close their facility;
- Scheduled repayments for purchases may be made either weekly, fortnightly, or monthly;
- each loan/purchase under the Credit Agreement will have a pre-set repayment profile;
- consumers should be able to pay a deposit for an order immediately, when required; and
- variable Continuing Credit Facility limits available based on etika’s credit risk assessment of individual consumer applications.
This product is designed for consumers who:
- meet etika’s key eligibility requirements (refer above);
- have a valid email address and Australian mobile number;
- have been properly identified in accordance with applicable AML/CTF rules;
- have a financial situation which meets etika’s credit risk assessment criteria and have the capacity to meet their financial obligations throughout the duration of the Continuing Credit Facility remaining open/active;
- desire a financial product, being one or multiple Continuing Credit Agreement(s) which comprise a Continuing Credit Facility, that allows them to use the facility limit to make multiple drawdowns/purchases either through or from etika’s merchant partner(s) where this product is offered;
- desire the flexibility to spread repayments for purchases up to 60 months;
- do not have an email account and/or Australian mobile phone, but do have a residential/postal address (for the purpose of receiving communications and correspondence by mail) and a valid landline phone number; and
- declare that at the time of application, they can service the principal balance of the loan and the $10.00 monthly Service Charge and do not anticipate any material change to their financial situation.
Insurance Premium Funding (Premium Funding Loan Agreement)
Product features:
- consumer or business loans to fund a general insurance premium;
- if required, the consumer provides etika with a mortgage right over the general insurance policy; and
- monthly payments for a duration of up to 12 months.
This product is designed for consumers who:
- meet etika’s key eligibility requirements (refer above);
- have a valid email address and Australian mobile number;
- have been properly identified in accordance with applicable AML/CTF rules as and when required;
- have a financial situation which meets etika’s credit risk assessment criteria and have the capacity to meet their financial obligations for the duration of the Premium Loan;
- wish to take out a valid general insurance policy;
- desire the flexibility to spread repayments for the general insurance policy over 12 months;
- are comfortable using a digital only product; and
- declare that at the time of application, they can service the principal balance of the Premium Loan and any relevant charges and do not anticipate any material change to their financial situation.
Consistency between the target market and products
etika has assessed the products and formed the view that they, including their key features, are likely to be consistent with the likely objectives, financial situation and needs of consumers in the target market for each product, as described above.
Distribution conditions
The following online distribution channels are used to direct the distribution of the products to the target market:
- Available for use on partners’ e-commerce stores or website and app (note: e-commerce partners do not play a role in distributing the etika products, assisting or advising consumers to apply for the products as the entire transaction is completed online by the customer); or
- In-store and through telesales via our authorised partners (note: in-store and telesales partners are not permitted to or authorised to provide any form of advice (whether financial or other) with respect to etika’s products and/or services and are instructed to provide informational assistance only if a customer has difficulty completing an application (whether online or offline), by referring them to the etika Customer Service team. etika’s merchant partners are not authorised representatives or distributors of etika and are subject to strict governance reviews and audit protocols, to ensure that their in-store and telesales practices are appropriate and compliant).
etika distributes its products online and through the etika portal with authorised partners using a standardised process for onboarding consumers. This control helps ensure that consumers that obtain the product are within the target market.
Our product marketing does not deliberately target consumers outside the eligibility criteria, which assists in ensuring the distribution is being directed towards the target market for whom the product has been designed. Further, through both online and offline applications, consumers are presented with information related to the relevant Terms & Conditions of the product being applied for, links to etika’s website or hard copies of each of our Privacy Policy, general terms and conditions as well as referral points to Consumer Law(s) so that consumers understand their rights and can form a decision about the appropriateness of the product(s) for them.
Review Triggers
Any of the following triggers may indicate that the TMD is no longer appropriate for the target market and a review is required:
- a material change to the design or distribution of any of the products or the development of a new product;
- material complaints in relation to the terms of any product and/or the distribution conduct;
- a significant increase in volumes of consumer hardship notices which etika determines may relate directly to the appropriateness of the product(s) and their determination, or the distribution practices of authorised partners with respect to in-store or telesales applications;
- product performance evidence that may suggest that the product is not appropriate for the target market;
- consistent or material partner feedback which suggests that the determination may no longer be appropriate;
- external events such as material adverse media coverage or regulatory attention; or
- regulatory notice for immediate cessation of product distribution or particular conduct in relation to the product.
Review Date
This TMD was completed on 5 October 2021. The most recent review was completed on 29 June 2023, and each ongoing review, must be completed within each consecutive 12 month period from the completion date.
Where a review trigger has occurred, this TMD will be reviewed within 10 business days.
