ASIC warns on necessity of EDR scheme membership
The Australian Securities and Investments Commission (ASIC) has reinforced the importance of membership of approved external dispute resolution (EDR) schemes after cancelling the licence of a Queensland finance and mortgage broker.
ASIC announced this week it had cancelled the licence of Pump Financial Pty Ltd after it was found it had failed to hold membership of an approved EDR scheme.
ASIC said Pump Financial had been granted a licence to engage in credit activities as an aggregator, finance broker, mortgage broker and mortgage manager in January 2011, but on 18 January 2012, the company's membership of the Credit Ombudsman Services Limited had been cancelled because it had not been renewed.
Commenting on ASIC's actions in cancelling Pump Financial's licence, ASIC commissioner Greg Tanzer said it was integral that all licensees were members of an approved EDR scheme, as such schemes provided consumers with alternatives to legal proceedings.
"The importance of EDR schemes means that ASIC will have no hesitation in cancelling the credit licence of those who do not hold membership of either of the ASIC approved schemes," he said.
Tanzer said Pump Financial had the right to appeal to the Administrative Appeals Tribunal.
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