ASIC bans credit broker following fraud convictions

Mr King made 74 false documents, including 57 false payslips, 9 false PAYG payment summaries, and 8 false real estate documents between July 2013 and May 2016, with the intention that he or another person would utilise them to support loan applications for clients of his credit brokerages.

Subsequently, Mr King or others would then gain loan commissions for the approved loans, according to ASIC.

Mr King part-owned and operated two credit brokerage businesses — JT King Finance Pty Ltd (JT King) and Australia Enterprises Pty Ltd (Australia Enterprises) — which helped clients obtain home loans, car loans, personal loans, and credit cards, with the businesses generating income via commissions on approved loans referred to lenders.

According to ASIC, Mr King and others obtained from the approved loans ranging from $643.50 to $6,795.36 in upfront commissions and $99.67 to $2,470.69 in trail commissions. The total amount of commissions was $81.057.35.

On 12 December 2022, Mr King pleaded guilty to the charges of making a false document to obtain financial advantage and was sentenced and convicted in February 2023 to a 14-month intensive corrections order.

On the basis of these convictions, ASIC has banned Mr King from:

• Providing any financial services or engaging in credit activities
• Controlling an entity that carries on a financial services business or another person who engages in credit activities
• Performing any function involved in the carrying on of a financial services business
• Performing any function involved in the engaging in of credit activities
• Mr King currently has the right to appeal to the Administrative Appeals Tribunal for a review of the regulator’s decision.

Lender hit with penalty for excessive interest charges

The Federal Court recently ordered Layaway Depot Pty Ltd (Layaway) to pay a penalty of $375,000 for breaches of the Credit Act after an investigation by ASIC.

According to ASIC, Layaway marketed consumer electronics (such as mobile phones and tablets) to financially vulnerable consumers who may not have access to mainstream credit.

It was found that Layaway charged excessive interest rates on 70 loans taken out by consumers for the purpose of buying electronic goods. ASIC alleged that the lender had customers paying instalments that totalled $780 for a Bluetooth speaker that retailed for $200 and $1,200 for a mobile phone that retailed for $249.

[RELATED: Lender penalised for charging excessive interest to consumers: ASIC]