Melbourne fin services business cops $9m penalty

ASIC/penalty/Financial-Circle/policy/regulation/

image
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

The succession dilemma is more than just a matter of commitments.This isn’t simply about younger vs. older advisers. It’...

1 week 4 days ago

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

1 month ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

1 month 1 week ago

AMP has settled on two court proceedings: one class action which affected superannuation members and a second regarding insurer policies. ...

4 days 3 hours ago

ASIC has released the results of the latest adviser exam, with August’s pass mark improving on the sitting from a year ago. ...

2 weeks ago

The inquiry into the collapse of Dixon Advisory and broader wealth management companies by the Senate economics references committee will not be re-adopted. ...

3 weeks ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Powered by MOMENTUM MEDIA
moneymanagement logo