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The regulator has banned the Sydney-based broker for a range of breaches.
The Australian Securities and Investment Commission (ASIC) has alleged that Sydney-based mortgage and finance broker Qingshan Yu enabled the mishandling of home loan applications that resulted in false documentation being submitted to lenders in his name.
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As a result, ASIC has banned Mr Yu from engaging in any credit activities, operating a credit business, and performing in any function relating to carrying on a credit business for a six-year period.
In addition, ASIC has revoked the Australian credit licence of Mr Yu’s company Actif Pty Ltd (Actif).
The company had held a credit licence since 9 November 2010 and provided mortgage and finance broking services, such as arranging home loans.
ASIC also determined that Mr Yu:
- Contravened credit legislation by making false disclosures to ASIC in two successive annual compliance certificates
- Exhibited behaviour that was inconsistent with the attributes of diligence, honesty, integrity, and good judgement
Furthermore, ASIC determined that Mr Yu would be likely to contravene credit legislation and is not “a fit and proper person to participate in the credit industry”.
The revocation of Actif’s licence and Mr Yu’s banning from the credit industry took effect on 28 June 2023.
Mr Yu and his company have the right to appeal to the Administrative Appeals Tribunal for a review of the regulator’s decision.
Payday lenders banned
Recently, ASIC won its case against Cigno and BHF Solutions, with the Federal Court finding that both lenders engaged in credit activities with holding an Australian credit licence.
As a result, ASIC obtained permanent injunctions against Cigno and BHF Solutions in the interest of consumer protection.
The regulator stated that BHF Solutions was providing loans with fees under a credit contract to consumers, however, Cigno, under a services agreement, separately charged excessive fees for arranging and managing the credit.
Combined with BHF Solution’s fees, these fees exceeded the prescribed maximum charge allowed in order to be exempt from holding a credit licence, according to ASIC.
Federal Court of Australia Judge Justice John Halley found that the objective purpose of this lending model was to avoid the provisions of the National Credit Act and Code that are put in place to protect consumers from disproportionate charges/fees.
The injunctions prevent both lenders from operating with this lending model or collecting repayments and fees from consumers on loans provided under the model.
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