A former broker has been sentenced to 21 months of imprisonment after he pleaded guilty to seven charges of giving false information to a lender and one fraud charge.
Banned Perth broker Peter Lachlan McDonald has been sentenced in the Perth Magistrates Court to 21 months’ imprisonment following an investigation by ASIC into his brokering of motor vehicle finance contracts while working as an employee of Get Approved Finance.
However, the sentence was fully suspended for 12 months after Mr McDonald paid a $5,000 bond to the court.
Mr McDonald was permanently banned from engaging in credit activities and providing financial services in July 2015.
Details of the case
According to the financial services regulator’s investigation, it was found that between January and April 2013, the broker submitted to Esanda (a business then owned by ANZ) four motor vehicle finance contracts that included information that “falsely represented” the guarantors of the loan as the applicants.
It is alleged that Mr McDonald had previously advised his clients, who had poor credit histories, that they would be approved for vehicle finance if their loan applications were supported by guarantors.
In two further loan applications, Mr McDonald is alleged to have provided information to Esanda that falsely represented that insurance quotes were issued insurance policies, knowing that Esanda required all financed vehicles to be insured before loans were approved.
Further, in one additional application, ASIC alleged that Mr McDonald inserted what purported to be his client’s signature on an extended warranty and submitted that document to Esanda after the client had agreed to purchase the extended warranty.
In relation to one of the seven loan applications, Mr McDonald is also alleged to have acted fraudulently by “artificially interposing a third-party vendor while representing to his client that the vehicle being purchased on credit was being sourced directly from a car dealership”. In doing so, he gained a pecuniary benefit.
A number of other former Get Approved Finance brokers have also been banned by ASIC from both the credit and financial services industries, and in October 2015, ANZ agreed to compensate more than 70 borrowers for car loans organised by Get Approved Finance.
Get Approved Finance was the trading name and operated under the Australian credit licence of West Australian-based finance broker Jeremy (WA) Pty Ltd. The company was deregistered in September 2017.
Speaking of the case, ASIC deputy chair Peter Kell said that Mr McDonald’s actions abused the trust of his clients, who are entitled to expect brokers to act honestly and in their best interests.
“Loan fraud, which often involves an intermediary like a finance broker, is a particular focus of ASIC,” Mr Kell said.
“We are actively working to improve standards in the broking industry and warn anyone tempted to deceive lenders or mislead customers that they will be held to account.”
[Related: Former finance broker pleads guilty to fraud]
Annie Kane is the editor of The Adviser magazine, Australia’s leading magazine for mortgage brokers. As well as writing news and features on the Australian mortgage market, financial regulation, fintechs and the wider lending market – Annie is also the host of the Elite Broker podcast and regulator contributor to the Mortgage Business Uncut podcast.
Before joining The Adviser team at Momentum Media in 2016, Annie wrote for a range of business and consumer titles, including The Guardian (Australia), BBC Music Magazine, Elle (Australia), BBC Countryfile, BBC Homes & Antiques, and Resource magazine.
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