Budgeting provider MyBudget applies for ASFL

ASIC AFSL

19 July 2021
| By Chris Dastoor |
image
image
expand image

Personal budgeting service MyBudget has applied for Australian financial services licence (AFSL), following an investigation into its operating model by the Australian Securities and Investments Commission (ASIC).

ASIC said it was particularly concerned about unlicensed financial services conduct by an entity providing debt management services during the COVID-19 pandemic, when more consumers may face financial hardship and seek budgetary and related assistance.

“ASIC has formed the view that MyBudget is providing services to its clients via a non-cash payment facility, which would require the company to hold an AFSL,” ASIC said.

MyBudget had never held an AFSL and was not authorised to provide financial services, but it did hold an Australian credit licence and was a member of the Australian Financial Complaints Authority (AFCA).

ASIC said MyBudget’s business involved developing a budget plan to assist clients to meet their financial objectives and goals.

“Once the budget is developed, MyBudget offers a service to manage the budget on the client’s behalf,” ASIC said.

“MyBudget’s service involves the client depositing their income into a MyBudget account, from which MyBudget then facilitates the distribution of funds in accordance with the budget plan.”

In May 2020, MyBudget was subject to a ransomware incident, which caused a system outage, which left 13,000 clients unable to access their online account for at least seven days, meaning clients were unable to view their account balance and did not know whether automated payments had been made.

MyBudget was still able to process client payments manually, although some clients faced significant delays and difficulties reaching MyBudget through the phone line.

ASIC subsequently commenced an investigation into MyBudget to consider whether it was operating a financial services business without holding an AFSL.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

7 hours ago

Interesting. Would be good to know the details of the StrategyOne deal....

4 days 12 hours ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 2 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 4 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

3 days 10 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

2 days 13 hours ago