ASIC cancels AFSL of timeshare company
The regulator has cancelled the Australian Financial Services licence (AFSL) and credit licence of Ultiqa Lifestyle Promotions Limited.
Ultiqa Lifestyle Promotions, which is in liquidation, has seen its AFSL and credit licence cancelled following an Australian Financial Complaints Authority (AFCA) determination.
On 28 June 2024, AFCA made a determination against Ultiqa, which it failed to pay. As a result, the Compensation Scheme of Last Resort (CSLR) paid $19,429.60 to a person for AFCA’s determination on 2 October 2024 and notified ASIC.
This led to Ultiqa’s AFS and credit licences being cancelled on 16 October 2024.
“Where the CSLR pays compensation to an eligible consumer in relation to an AFCA determination and notifies ASIC of the details of the firm that failed to pay the compensation, ASIC must cancel the Australian Financial Services licence and credit licence of the firm,” ASIC stated.
“The cancellation is not subject to discretion or merits review.”
This is not ASIC’s first regulatory action in relation to Ultiqa, the statement continued. On 3 November 2021, the regulator commenced proceedings against Ultiqa.
Later on 17 May 2022, the court found that between October 2017 and March 2019, financial advisers acting as authorised representatives of Ultiqa advised consumers to invest in the Ultiqa Lifestyle Scheme, a timeshare scheme, despite such advice not being in the consumers’ best interests and not being appropriate to their circumstances.
Ultiqa was then ordered by the Federal Court to pay $900,000 following the ruling on 17 October 2022.
At the time, ASIC deputy chair Karen Chester said: “Ultiqa prioritised sales over appropriate advice and ultimately consumers’ best interests. The penalty against Ultiqa, the first against a timeshare provider, sends a further significant message to the timeshare industry. When sold alongside financial advice, it is both fundamental and legally required that the advice is in the consumers’ best interests.
“Timeshare schemes are complex financial products. They can be difficult to understand, to compare and to exit. They involve significant long-term financial commitments of tens of thousands of dollars and are often loan-financed. Further, despite these significant costs, many could not even book holidays in their timeshares due to a lack of availability – meaning they got nothing for their money.”
Ultiqa ceased promoting the sale of interests in the Ultiqa Lifestyle Scheme on 28 January 2020 and was placed into members’ voluntary liquidation on 30 April 2021.
AUTHOR
Jasmine Siljic
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