SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Melbourne ACL holder in court over alleged NCCP breaches

Melbourne ACL holder in court over alleged NCCP breaches

Melbourne ACL holder in court over alleged NCCP breaches Melbourne ACL holder in court over alleged NCCP breaches
Staff Reporter Comments 0
Shares 0

The Federal Court of Australia has made interim orders restraining a Melbourne-based ACL holder from engaging in a number of activities including carrying on a financial services business, providing financial advice or entering into credit contracts.

ASIC commenced proceedings in the Federal Court against Financial Circle on 15 December 2017 alleging breaches of the Corporations Act 2001, the National Consumer Credit Protection Act 2009 and the Australian Securities and Investments Commission Act 2001, including breaches of the best interests duty and unlicensed conduct. ASIC has sought injunctive relief as well as declarations of contraventions and financial penalties.

Financial Circle offers loans to consumers which ASIC alleges can only be obtained if the consumer agrees to obtain and implement financial advice. The advice recommends purchasing personal insurance products and switching superannuation providers. When consumers implement the advice, significant advice fees are paid to Financial Circle from the consumer’s superannuation and in commissions from the insurers. ASIC alleges that Financial Circle’s conduct is “misleading, deceptive and unconscionable”.

Following a contested hearing on 22 December 2017, Financial Circle gave an undertaking that until 4pm on 10 January 2018, it would not:

• carry on a financial services business;
• provide financial product advice or deal in financial products;
• enter into credit contracts as a credit provider; and
• promote, advertise or offer loans or cash payments to prospective retail clients.

The orders made by the Court on 10 January 2018 prohibit Financial Circle, until the final hearing of the matter, from engaging in activities including:

• carrying on a financial services business;
• providing financial product advice or dealing in financial products;
• entering into credit contracts as a credit provider; and
• promoting, advertising or offering loans or cash payments to prospective retail clients.

The court made interim injunctive orders on the basis that there was an “appreciable risk” of future contraventions by Financial Circle of each of the provisions relied upon by ASIC.

Financial Circle holds an Australian financial services licence which authorises it to advise clients about life risk insurance and superannuation products and deal in those products. Financial Circle also holds an Australian credit licence which authorises it to engage in credit activities other than as a credit provider. Financial Circle authorises representatives to provide personal financial advice to retail clients who access their services via their website.

The order is in place until the hearing and determination of the matter.

Melbourne ACL holder in court over alleged NCCP breaches
TheAdviser logo
Shares 0
James Mitchell

James Mitchell

James Mitchell has over eight years’ experience as a financial reporter and is the managing editor of mortgages at Momentum Media. He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, SMSF Adviser, Smart Property Investment, Residential Property Manager and Real Estate Business.

He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group. James holds a BA (Hons) in English Literature and an MA in Journalism.

James is also the editor of Wellness Daily.

FROM THE WEB
more from the adviser
ING appoints new head of third party

ING has announced that it has appointed a new head of third-party...

Regulator reviews school financial literacy programs

The corporate regulator is set to review financial literacy and b...

YBR takeover offer to expire today

Mercantile OFM’s off-market offer to acquire all of the ordinar...