Q1 What are 2 ethical considerations that Karen is faced with?

Select one or more:

a. That Daniel has asked Karen not to tell his sister of his loan application

b. That if she did not personally know Geraldine she would not be have been aware of Daniels gambling history

c. That Daniel does not have much in savings for a high income

d. That Geraldine has told Karen of Daniels gambling problem in confidence

Q2 What are 3 enquiries Karen could undertake to ensure she is acting ethically and in everyones best interests including the Lender?

Select one or more:

a. Ask Daniel if there are any other factors that could impact his credit decision

b. Ask Daniel to provide details of his travel experiences to demonstrate low level of savings

c. Speak to Geraldine in confidence to say her brother has applied for a home loan

d. Ask Daniel for 6 months bank and credit card statements to review his spending

Q3 If Karen decides not to undertake further enquiries regarding Daniels home loan enquiry and he experiences financial hardship caused by gambling in the future, has she acted unethically?

Select one:

a. No, not if she has followed credit policy and company procedures

b. Yes, she is obliged to undertake reasonable enquiries based on all information she is aware of

c. No, she can only act on the information provided by the client

d. No, if she did not know Geraldine personally she would not be aware of Daniels history

Q4 If Karen was uncomfortable in handling this enquiry what 2 actions could she take?

Select one or more:

a. Refer to her line manager/compliance officer for advice

b. Refer the enquiry to a colleague without explaining the details of the ethical issue so they can make their own informed decision

c. Process the application in the hope that there will be no future issues

d. Advise Daniel that there is a conflict of interest under her company policy and that she will need to refer this matter to her line manager

Case Study 4 - Daniel is back from working interstate. Daniel has been living and working in interstate for a large corporation as a highly paid consultant and has decided to move back home with a job transfer with the same organisation. He has saved up some money to buy his first property. He doesn't have much of a deposit and has approached his old school friend Karen who he knows is a loan writer. Karen is also great friends with Daniel's sister Geraldine. Geraldine has spoken of her brother and mentioned that he had encountered some problems with gambling while working interstate a while ago. Geraldine was quite worried about him for a period of time. When Daniel meets with Karen, he does not mention any of his past gambling problems. When they discuss his income and his low savings, Daniel is quick to point out that he had a very hectic social life and fun travel experiences, hence the low level of savings. He also asks her not to mention to his sister that he has approached her to apply for a home loan