Clicky

Melbourne fin services business cops $9m penalty

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.

Related News:

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.




Related Content

Academics urge board to monitor ASIC and APRA

An over-arching assessment board should be appointed to provide continuous oversight of Australia’s financial services regulators, according to a ne...Read more

Does ASIC intend to regulate itself?

The Australian Securities and Investments Commission (ASIC) chair, James Shipton, has come under fire from the Royal Commission, with both Senior Coun...Read more

Frydenberg names new ASIC deputy chair

The woman who has been integral to the Productivity Commission’s sometimes controversial examination of the competitiveness and efficiency of supera...Read more

Author

Comments

Add new comment