ASIC News Update

ASIC has reported the first case of a civil penalty for advising that credit was available when the entity did not hold an Australian Credit License.

The report reads:

A court has ordered a Sydney director to pay a penalty of $7500 after his former company was found to have advertised that it could provide credit despite being unlicensed.

It is the first civil penalty proceeding brought by ASIC under the National Consumer Credit Protection Act 2009 (National Credit Act).

The Federal Court in Sydney on 31 August 2012 found Nathan Elali, of South Hurstville, was the sole director of a company formerly known as EasyChoice Home Loans Pty Ltd (EasyChoice), when it advertised on its website for more than a year that it provided home and investment property loans. The company did not hold an Australian credit licence. As the sole director of the company during the period, Mr Elali was found to have been knowingly concerned in the company’s contravention of the National Credit Act.

Despite repeated warnings by ASIC to remove the advertising, the company did not respond. The material was removed only after ASIC had commenced court action.

ASIC Commissioner Peter Kell said: ‘Where ASIC identifies a possible breach of the consumer credit laws, our first step will often be to require the company to take action to ensure the contravention ceases.

‘If the company fails to comply, we are prepared to commence civil penalty proceedings as part of our approach to enforcement.’

Source: ASIC Media Release.