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Immigration Daily News Agent challenges OMARA over their interpretation of interest on clients' accountAustralian Immigration Daily News
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Agent challenges OMARA over their interpretation of interest on clients' account
The following argument has been occurring between the OMARA and RMA, Carl Smart between 6 March 2014 and 14 March 2014. Mr Smart is now seeking legal advice through an accredited specialist in tax and finance law. In the mean time, I will FOI the qualifications for this OMARA Officer to ensure they are qualified to be giving advice of this kind. In my opinion, it is not enough for an officer at OMARA to say, 'I understand that'. An officer's understanding is not 'fact in law'.
OMARA EMAIL TO CARL SMART
Dear Mr Smart,
Following a review of your clients’ account statement I note that interest is being accrued.
As the clients’ account is to be used solely to hold client monies until your services are provided any interest earned from this account must be apportioned to your clients proportionally. In the alternative, you may open a non-interest bearing account hence alleviating the need to calculate and apportion interest to your clients on a monthly basis.
The latter option is considered best practise in the handling of client monies.
For your information please find attached a copy of the Authority’s Client Monies Toolkit which further addresses your financial obligations under the Code and identifies best practise in the handling of client monies.
https://www.mara.gov.au/media/77948/client_monies_toolkit_navigable_mar2013.pdf
Regards,
Sarah Alkan
Team Leader Registration & Professional Development
Office of the Migration Agents Registration Authority
Telephone: (02) 9078 3544
Email This email address is being protected from spambots. You need JavaScript enabled to view it.
Website www.mara.gov.au
CARL SMART RESPONSE
Sarah,
I've reviewed the Code of Conduct and cannot find which part of the Code of Conduct I am in breach of by collecting interest from money held in a Clients’ Account. I also cannot find any reference in the Code of Conduct which specifically states interest collected in a Clients’ Account should be paid back to clients.
My understanding is that the toolkit referred to in your email below is a guide for Agents. It does not form an extension of the Code of Conduct.
Perhaps you can enlighten me?
Warm regards,
Carl Smart
Director
Mob. +61 (0) 402 871 721 (Australian number)
MARN 0100781
OMARA RESPONSE
For-Official-Use-Only
Dear Mr Smart,
I understand that the money that you collect in advance from clients is placed into your client account. As this money belongs to your clients until your immigration services are completed, any interest accrued on your client money, is the property of the client.
In addition, you have provided your clients a Service Agreement which indicates your schedule of fees. Therefore any financial benefit in addition to this Agreement, would be outside your schedule of fees.
Part 7 financial duties under clause 7.1 of the Code of Conduct defines the client account specifically as:
(b) money paid by clients to the agent for fees and disbursements (the clients’ account).
The Authority’s toolkit is designed to provide additional clarification and case examples for best practise.
Regards,
Sarah Alkan
Team Leader Registration & Professional Development
Office of the Migration Agents Registration Authority
Telephone: (02) 9078 3544
Email This email address is being protected from spambots. You need JavaScript enabled to view it.
Website www.mara.gov.au
CARL SMART RESPONSE
Sarah,
I will get some legal advice. It appears that MARA likes to inflict their own rather loose interpretation on the Code on Agents.
MARA should spend more time assisting Agents in a positive manner rather than niggling at them for the smallest of things.
Comments
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Friday, 14 March 2014Just adjust your fee agreement and add this 'in the event that client pays funds in advance which are held in an interest bearing clients' account held by the RMA, the client agrees that any interest that accrues with respect to those monies shall remain the property of the RMA as a service fee arising incidental to compliance with the code of conduct'. Just get the client to sign this or agree to this if you have not got it in your fee agreement and then the OMARA will have to rack off. Don't they have better things to do with their time?
If the Code of Conduct is silent as to the status of interest then the Code of Conduct constitutes the MINIMUM REQUIREMENT. There is no requirement to adopt 'best practice' unless it is provided for in the statutory scheme. -
Friday, 14 March 2014
That is excellent advice - I will make the insertion into my fee agreement as per above. Thank you.
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Friday, 14 March 2014
I agree that the interest earned should be the property of the client as the money is placed on trust and until payment of any fees or disbursements, any interest accrued is for the benefit of the client (beneficiary) NOT the RMA (trustee). It is under the common law of trust.
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Saturday, 15 March 2014
We lawyers who run trust accounts have to pay part of it into a statutory deposit account where it earns interest and that interest is not returned to the client. It's used for legal aid purposes. However, the "confiscation" of the client's interest is backed by legislation. The problem here is that it's impossible to work out and divvy up the small amounts involved.
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Friday, 14 March 2014
I totally agree with you Alan, spot on.. I mean for heaven's sake, seriously? Lawyers even Realestate Agents!! aren't allowed to do this. If you want the profession to be considered one of integrity this is one battle RMA's should not fight
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Friday, 14 March 2014
FOI: Qualifications of Sarah Alkan - Team Leader Registration & Professional Development, Office of the Migration Agents Registration Authority
Liana Allan liana@visacorp.com.au
5:15 PM (0 minutes ago)
To the Manager of FOI
I would like to FOI the qualifications held by Ms Sarah Alkan from the Office of the MARA. Please include any registrations or licences held by Ms Alkan, in particular any which would allow Ms Alkan to to provide advice in financial matters, accounting, banking or law.
Thank you.
Liana Allan -
Friday, 14 March 2014
I was told the same thing when I applied for re-registration and I was asked to open a non-interest client account otherwise proportionate the interest back to the client. I agree why OMARA is interested to look at minor things and the code of conduct says nothing about it.
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Friday, 14 March 2014
The Office of MARA like to dictate many things to agents until they are faced with legal challenge to stop them. Actually MARA have become law unto themselves. Has anyone thought to FOI qualifications of all MARA staff? In this regard, I must say MARA need to stop expanding Code of Conduct to suit themselves. Nobody want to look at Client Monies Toolkit or Ethics Toolkit. They have made these inferior product and want to justify the spending of such a big amount of money on those bad products that they now refer us to them all the time. I bet they will force us to learn them as CPD next. If they want us to be like lawyers then it is about time they started to increase their own skills and legal expertise in house because we don't want to deal with inferior staff at MARA either
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Friday, 14 March 2014
Hello all, The migration agent does not have obligations equivalent to those applicable to solicitors under the Legal Profession Act Chapter 3. As migration agents, we are not bound by the Legal Profession Act.
The MARA is attempting to introduce a Trust Account requirement by slight of hand; there is absolutely nothing in the Code of Conduct that allows the implication that money held on deposit is owned by the client.
The Code goes so far as to allow;
7.6 If a registered migration agent provides a service to a client on the basis of a
conditional refund policy, a ‘no win, no fee’ policy or an undertaking to similar
effect:
(a) the agent must have sufficient funds available to be able to cover any
amount that the agent may become liable to pay to the client under the
policy or undertaking; and
(b) the agent must meet that obligation by:
(i) keeping funds in the clients’ account; or
(ii) keeping a security bond; or
(iii) maintaining adequate insurance.The Client Account is a device used by MARA to try to impose onto agents an obligation that is not found outside of the legal profession.
The MARA cannot possible argue that the moeny is owned by the client when those options in 7.6 (b) are available to the agent.
We all hold money as security against payment; thus avoiding GST problems in the event of refunds.
This is another bureacratic overreach by the MARA. Shame on these high handed apparatchicks.
John Findley MARN0316938· Frank Lin likes this comment. -
Friday, 14 March 2014
Shocking waste of our money and taxpayer money. What are we talking about here $10.00? I am sure the agent can work out the interest payments over the time and then give to the client out of pocket change from back pocket. Such a waste. MARA should be ashamed of itself chasing small issues like this and not chasing down the criminals. Whole system needs overhaul here because MARA cannot help fix UNREGISTERED PRACTICE so what is the point? If you report it to them they just tell you they can't help. They only try and ruin the livelihoods of registered agents. That is their mantra - regulate RMAs to death.
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Friday, 14 March 2014
We are not keeping the clients' money in the client account for a longer time so that we will be able to gain interest. It is the Department of Immigration which is taking a long time to process our clients' applications and our clients' money is remaining in the client account for long periods of time. If DIBP improves their service standard and start making decisions quickly, we are more than happy to transfer the money to our operating account and use it.
How about the interest of application fees paid by our clients to the Department of Immigration? The department is of course taking interest from the application fees the client has paid but makes decisions after 2 or 3 years. The interest of the application fees would be much more than the interest we get from the clients’ account.
How much money can the agent earn from the interest? It will not be so huge, and for a sole practitioner it might be less than $100/ year. In some instances, the profit might be less than 5 dollars per client. OMARA must make a practical rule in this regard considering the effect. There would be some provision similar to “non lodgement” like in tax return for those sole practitioner migration agent.· Frank Lin likes this comment. -
Friday, 14 March 2014
A good point and good example. Do builders have to refund Client money held in trust? What about the costs and interests we lose in performing the task before completion. The interest earned on a Client account is minimal and designed to avoid bank fees more then anything. It might pay for the clients coffee.
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Friday, 14 March 2014
Does their new CEO realise what a nightmare he has walked into over at MARA. Labor left the MARA as a regulating regulator regulating the sheer life out of the profession.
Labor didn't like agents and unions hated us and now what has happened is that the bureaucrats have got out of control with their abundance of controls, and their ideas of how to control us..... that they are out of control!
Liberal government has come along. Out went Stephen Wood (out to pasture) and in has come Steve Ingram.
Steve Ingram has a hard clean up job because he has all this mess to clean up after years of bad Labor government and decisions about red tape on us. Worst thing about all this is this regulator is not even capable of doing it's job properly. It is embarrassing having to deal with them. Always advocate for the client when a complaint comes in. Put me to so much work to justify I made no mistakes.
I am going to that event to get rid of red tape in our profession. Please all agent should come along to this one and support Migration Alliance to support out profession. We need this government to stop hassling us and focus on proper enemy - unregistered agent. -
Friday, 14 March 2014
Is it clear agents do not respect their regulator? This is appalling. DIBP cannot regulate people who are more educated than them.
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Friday, 14 March 2014
I contacted the local banks and none of them would open a trust account for me, as they only have trust account for lawyers and real estate agents. I can open an account without interest but I wouldn't be able to open an account without fees. I will still have to pay the account fees for client account. Is that fair?
What happen to your trust accounts, my dear solicitor colleagues? -
Friday, 14 March 2014
Frank, good point!
Perhaps the Officer at MARA has more banking and financial advice she can provide on how to open a trust account / clients' account at a bank? Perhaps she can suggest banks which offer the exact services she is talking about here. Also she can offer her banking and financial services licence number to us as well. I cannot wait to see what comes back from Liana Allan FOI of this person's qualifications. I think agents are realising that our regulator is in fact toothless tiger. When push comes to shove they generally lack legal basis to enforce anything they do, say, suggest or write. -
Friday, 14 March 2014
In practice the bank fees would eat most, if not all, of the interest earned. We cannot use clients' monies to pay the fees - or are we supposed to now invoice our clients for their proportion of the bank fees as well as send them their proportion of the inerest earned.
Who has time to dream up these things at MARA or don't thery have anything positive to do. -
Friday, 14 March 2014
K Chan seems to think Labor is responsible for every bad thing in how our profession is regulated. Has he or she no memory whatsoever? Did the Liberals ever do anything about non-registered practice, K Chan? No. The disrespect of agents is bipartisan. And what kind of planet do you inhabit to think that this promise of cutting red tape will benefit us? Frankly, I do not want to read Liberal Party propaganda on this blog, particularly on a Friday afternoon!
· Narelle Joy-Ballard likes this comment. -
Friday, 14 March 2014
This is an interesting deliemea.
It could be argued that the client has contracted services to be provided and that the money is only held in trust as an assiduity not an investment or trust account. I tend to leave the money in the client account until the completion of all work, Even though I am entitled to invoice the client at various stages. The interests earned is not significant but I guess it could mount up if you had hundreds of clients funds.
Perhaps MARA could legislate that all interest is to be paid to the government as is the case in interests earned from Residential bonds to help fund MARA administration costs. If this in turn helps reduce the annual fee charged to agents, many who do not make a large profit.
Alternatively agents could include in their contract a sliding scale fee that changes over time to equal the costs of any interest earned to cover increases in inflation· Frank Lin likes this comment.
Immigration blog
Put this Officer on the B LIST. Just like DIBP can have A and B list agents, we too can give the OMARA A and B list. This one, is defintely on the B list.