ASIC moves to penalise firm for AFCA failing
The Australian Securities and Investments Commission has broken new ground by commencing proceedings against credit licensee Lightspeed Finance over failure to comply with Australian Financial Complaints Authority (AFCA) determinations.
The firm’s director, Mark Fitzpatrick, was also included in the proceedings.
On 4 December, 2018, AFCA made its first determination regarding a Lightspeed client compliant, which required Lightspeed to pay a loan debt owed by the client to a lender, prior to the client repaying Lightspeed the initial loan amount.
On 12 July, 2019, AFCA made a second determination in favour of the client, which reduced the client’s liability.
Both determinations were accepted by the client and were binding on Lightspeed under AFCA rules.
ASIC alleged Lightspeed failed to give effect to both AFCA determinations and that Fitzpatrick was knowingly involved in these breaches.
Reforms introduced as part of the Royal Commission meant that since 13 March, 2019, that a failure to co-operate with AFCA was a civil penalty offence with penalties of $10.5 million for a company and $1.05 million for an individual.
AFCA replaced the Financial Ombudsman Service (FOS) from 1 November, 2018, and the Government announced in the 2019 budget victims would be eligible to receive unpaid FOS determinations.
AUTHOR
Chris Dastoor
Recommended for you
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
The Senate economics legislation committee has recommended Schedule 1 of the Delivering Better Financial Outcomes legislation be passed as it is a “faithful implementation” of the recommendations.
Treasurer Jim Chalmers has handed down his third budget, outlining the government’s macroeconomic forecasts and changes to superannuation.
