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 InterventionPowers) 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 are view 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)
etika’s products are designed for consumers who are:
- Over 18 years of age;
- Australian residents;
- Have a financial situation which meets etika’s credit score and risk assessment criteria;
- Have been properly identified in accordance with applicable AML/CTF rules; and
- Be capable of entering into a legally binding contract.
b. Excluded class of consumers:
- Do not meet the eligibility requirements;
- Are below the age of 18;
- Require a product with an unrestricted spending limit;
- Have low levels of literacy (including but not limited to financial literacy and technological literacy)
- Have other vulnerabilities which require specialised assistance (including cognitive impairment and mental capacity limitations)
- Do not have an established credit history; or
- Are experiencing financial difficulty or require direct financial and budgeting advice.
etika’s products are designed for consumers who are seeking to pay for products and services on an instalment basis with a fixed termination date, ensuring the consumer is not entering into a revolving debt.
Each product has been designed for consumers whose likely objectives, financial situation and needs align with the product. Each consumer application has its own real-time assessment where the available lending amount and duration is carefully selected and agreed on under etika’s product, credit score and risk assessment criteria.
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 Loans
Product features:
- Interest and fee free consumer loans;
- Up to 60 months unsecured loan contracts;
- Pay either weekly, fortnightly, or monthly;
- Be able to pay a deposit for an order immediately, if 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 as and when required;
- Have a financial situation which meets etika credit score and risk assessment criteria if applicable;
- Desire a loan to purchase goods or personal services;
- 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
- Can service the principal balance of the loan.
Interest and Fee Free Consumer Loans with Co-Contribution
Product features:
- Interest and fee free consumer loans;
- Up to 60 months unsecured loan contracts; and
- 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 as and when required;
- Have a financial situation which meets etika credit score and risk assessment criteria if applicable;
- Are eligible for and take part in a partner benefit programme;
- Are comfortable using a digital only product; and
- Can service the principal balance of the loan.
Insurance Premium Funding
Product features:
- Consumer or business loans to fund a general insurance premium;
- Provides etika with a mortgage right over the general insurance policy; and
- Pay monthly over a duration 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 credit score and risk assessment criteria if applicable;
- Wish to take out a valid general insurance policy;
- Require the flexibility to spread repayments over 12 months;
- Are comfortable using a digital only product; and
- Can service the principal and any service charges associated with the loan.
Interest and Fee Free Consumer Loans – Offline applications
Product features:
- Interest and fee free consumer loans;
- Up to 60 months unsecured loan contracts;
- Pay either weekly, fortnightly, or monthly;
- Be able to pay a deposit for an order immediately, if 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);
- Desire a loan to purchase goods or personal services;
- Desire a loan without interest and fees;
- 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 valid landline phone number; and
- Can service the principal balance of the loan.
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:
- Direct to consumer through online application via the etika website (www.etika.com/au);
- Available for use on partners’ e-commerce stores (note: e-commerce partners do not play a role in distributing the etika products or assisting 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, 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 authorised partners using a standardised process for onboarding consumers. This control helps ensure that consumers that obtain the product are within the target market.
Further, 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.
Review Triggers
Any of the following triggers may indicate that the TMD (Target Market Determination) is no longer appropriate for the target market and a review is required:
- A material change to the design or distribution of the 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
- Regulator notice for immediate cessation of product distribution or particular conduct in relation to the product.
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Review Date
This TMD was completed on 5 October 2021. The most recent review was completed on 8 December 2022, 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.
