Well why don't you just dob them into the NSW government? What is wrong with selling a service you are capable of doing?
I am not personally concerned one way or the other. If I have complicated needs, that require professional handling, then I use an appropriately licensed, insured, registered and recommended professional. If I don't need that level of expertise, I do it myself.
Everything may well be legitimate, (or grey enough to skirt the boundaries). For me, it is more a question of whether or not appropriate guarantees are in place.
In this case, I am simply pointing out that there appear to be gaps. As far as what is wrong with selling a service you are capable of, it depends whether or not you need a license and associated insurance. In the case of travel agents, various governments have decided that you do.
Now, Travel Compensation funds exist to protect against defaults, and that may not be a concern here if only points are being used. However, there are myriad things which can go wrong (probably more so when doing these sorts of bookings). The provider may well be capable and diligent in sorting out any issues, but what guarantees exist if things do go wrong, and a traveller ends up stranded because of some error?
This service does not appear to be a backyard job, or cheap, and so I would have expected some of these things to have been covered off.
Myself, it is not something applicable to me, I don't live in NSW where this is based, and all I intended was to raise the question for people to consider. Ultimately, everyone makes their own decisions. Personally, I place most credence in recommendation and reputation, and then knowledge that appropriate insurance arrangements (however provided) are in place, but then (like most members on this forum), I probably understand a little more about points redemption than the average man on the street.