Intermediaries in the consumer credit market have changed their approach to licensing under the National Consumer Credit Protection regime, with the majority preferring to operate as credit representatives rather than licensees.The Australian Securities and Investments Commission's senior executive leader for deposit-takers, credit and insurers, Greg Kirk, said that at the end of June last year ASIC had received 13,000 registrations from individuals and organisations planning to apply for Australian credit licences.But, in the end, the regulator received only 7097 licence applications, while it has received notification of 23,000 credit representatives being appointed."People in the industry are preferring to be under the licensing umbrella of someone else," said Kirk, who was speaking at the Credit Law Compliance conference in Sydney yesterday."People got the message that licensing and ongoing compliance would be a difficult test." The licensing process will be finalised at the end of this month and Kirk said 99.6 per cent of applicants have completed their applications. Kirk said ASIC was satisfied that the licensing process was resulting in better systems, training and compliance in the industry, and better outcomes for customers.He said 460 entities had withdrawn their applications during the vetting process and ASIC expected to refuse only a small number of applications.He said the next big test for the industry would be preparation of annual compliance certificates. The compliance rules under NCCP are tougher than the rules governing areas such as financial planning, because licensees will have to re-submit some of their key licensing documents (such as fit and proper) as well as attest to the adequacy of their systems and processes.Kirk said ASIC had found a small number of finance companies, mainly involved in consumer leasing, that were operating outside the licensing regime and some that had not joined an external dispute resolution scheme. ASIC has a number of projects underway to improve the integrity of the system. The practices of some credit card issuers, who use highly automated credit scoring systems, were falling short of responsible lending requirements."There have been changes to practices, but we are still working with a number of card issuers to get them up to speed, especially in relation to increased credit limit offers," Kirk said.Other areas of high risk where ASIC is focussing attention include low-doc and no-doc lending, payday lending and debt consolidation services.Consumer complaints received by ASIC cover unlicensed lending activity, misleading and deceptive conduct, debtor harassment in the collection process, and high fees and interest charges.ASIC has initiated 80 formal investigations as a result of complaints received, and Kirk said it has already taken action to "de-license" a number of entities.