Melbourne fin services business cops $9m penalty

ASIC penalty Financial Circle policy regulation

image
image
expand image

Melbourne-based financial services and credit business, Financial Circle, has been ordered by the Federal Court to pay penalties of just under nine million for multiple breaches of obligations and consumer protection laws.

Financial Circle offered personal loans to consumers of up to $5,000 that could only be obtained if the consumer agreed to receive and implement financial advice, which typically recommended purchasing personal insurance products and switcher superannuation funds.

Consumers were also charged significant fees and the business received ongoing commission payments from insurers, which often resulted in an erosion of around 30 per cent of the client’s superannuation balance.

The Court found that the business had:

  • Made false and misleading representations and engaged in misleading and deceptive conduct;
  • Engaged in unconscionable conduct; and
  • Breached its licensee obligations.

The Court ordered that, in addition to the pecuniary penalties, the business be permanently restrained from carrying on a financial services business, and from providing credit or entering into a credit contract as a credit provider.

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...

2 hours 58 minutes ago

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

4 days 8 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 6 hours ago

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

2 days 9 hours ago