ASIC takes legal action against lender
The Australian Securities and Investments Commission (ASIC) has taken legal action against Fast Access Finance for engaging in unlicensed credit activities.
Proceedings were filed in the Federal Court in Brisbane against Fast Access Finance, Fast Access Finance (Beenleigh) and Fast Access Finance (Burleigh Heads) for what the regulator claims is an elaborate diamond trading scheme designed to avoid consumer credit laws.
According to ASIC, the companies operated under a business model where consumers seeking small value loans (ranging from $500 to $2000) were required to sign documents which purported to be for the purchase and sale of diamonds in order to obtain a loan.
The regulator alleges in its court claim that the buying and selling of diamonds was a pretence as there were no diamonds involved in the transaction. Rather, the operators of the schemes were attempting to hide what were, in reality, loan transactions to which consumer credit laws applied, particularly the 48 per cent per annum interest rate cap that previously applied in Queensland.
The companies were also seeking to avoid the requirement to hold a licence for their lending activities, ASIC alleges.
“ASIC is committed to maintaining the integrity of the credit industry and the licensing system by ensuring businesses conduct themselves within the confines of the laws, which are intended to protect consumers,” ASIC Deputy Chairman Peter Kell said.
“Payday and small amount lenders can expect ASIC to take action where they engage in this type of avoidance behaviour.”
ASIC has sought civil penalties order against the companies, as well as compensation for six consumers.
The court may impose a penalty of up to $1.1 million for each contravention of section 29 of the National Credit Act.
Recommended for you
Net cash flow on AMP’s platforms saw a substantial jump in the last quarter to $740 million, while its new digital advice offering boosted flows to superannuation and investment.
Insignia Financial has provided an update on the status of its private equity bidders as an initial six-week due diligence period comes to an end.
A judge has detailed how individuals lent as much as $1.1 million each to former financial adviser Anthony Del Vecchio, only learning when they contacted his employer that nothing had ever been invested.
Having rejected the possibility of an IPO, Mason Stevens’ CEO details why the wealth platform went down the PE route and how it intends to accelerate its growth ambitions in financial advice.
