Budgeting provider MyBudget applies for ASFL

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.

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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.

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just a bit of coaching and guidance, no need for an AFSL - that's only for mugs.

A long time coming. The usual slack, delayed response from ASIC who are too busy belting actual financial advisers over the head. Now get cracking on the carpetbagger "Bare Foot Investor" and assorted accountants who cant cut the mustard as an actual adviser but cant help themselves from spouting their unqualified advice without an AFSL.

It seems there are many examples where the government and ASIC have simply given the green light to unlicensed advice. So why would anyone worry about having a licence? The licence puts a target on your back. Unlicensed advice is sanctioned and has absolutely no penalties enforced, and none of the red tape. Now excuse me I'm off to buy some crypto a tik tok influencer is promoting, what could go wrong.

“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. And yet, within one month of their application being submitted they were provided an AFSL. Companies that are doing the right thing and applying correctly before they start offering the service to their customers, must wait between 6-12 months to have their licence approved. Why were they even approved, when they clearly knew they needed this licence and yet they continued to trade with out it? Why weren't the directors held responsible? Why do these large companies get away with this sort of blatant disregard for the law?--- money maybe? I don't know, but I do know that MyBudget were told back in 2013 that they required this licence and yet they are rewarded 7 years later with a quick response to their application.

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