ASIC takes action against loan brokers
The Australian Securities and Investments Commission (ASIC) has commenced proceedings against two loan brokers, a lender and the sole director of three companies in the Federal Court.
ASIC has alleged that Australian Lending Centre (ALC) and Sydney Lending Centre (SLC) falsely represented various loans as being for business or investment purposes rather than for personal, household or domestic use.
Loans for personal purposes are protected by the Uniform Consumer Credit Code (UCCC), while loans that are for business or investment purposes fall outside this legislation, making them easier to obtain.
ASIC has alleged that between 2005 and 2008, ALC and SLC contravened the Australian Securities and Investments Commission Act (ASIC Act) by engaging in unconscionable conduct in broking and entering various finance broking contracts.
ASIC has also commenced proceedings against the lending company, AMR Investments, for engaging in unconscionable conduct by entering into a loan contract.
The sole director of the three companies, Christopher John Riotto of Haberfield, New South Wales, is also alleged to have aided and abetted the contraventions by SLC and AMR Investments in relation to one particular loan transaction.
ASIC is seeking declarations that the three companies and Riotto contravened the ASIC Act, compensation for two impacted borrowers as well as orders restraining ALC and SLC from falsely representing personal loans as business loans.
The matter is listed before the Federal Court in Sydney on 18 June, 2010.
From next month, ASIC will become the national regulator for consumer credit and finance broking, taking over from the states and territories.
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