Issue Date:  -  Wednesday, 9 June 2004

Finance Broker in Trouble

Joka Group Pty Ltd Prosecuted on 7 Breaches

The Perth finance broking business Home Ownership Company (WA) operated by Joka Group Pty Ltd, its director John Whitely and an employee Paul Matthews have pleaded guilty to a total of 15 breaches of the Door-to-Door Trading Act.

They pleaded not guilty to 4 other charges and sentencing in the Perth Court of Petty sessions has been deferred.

In 2003 a consumer received an unsolicited telephone call from the company offering a debt reduction service. Mr Matthews subsequently visited the potential client at their home and recommended a revolving line of credit with a bank.

They signed a Service Agreement with Home Ownership Company agreeing to pay it $4,400 for the service.

When the client received the loan documentation from the bank, they realised that the loan would not be advantageous to them and decided not to proceed and rescinded the Service Contract with Home Ownership Company.

The company advised the consumer that legal action would be taken against them and the consumer contacted the Department of Consumer and Employment Protection.

The department found that the company had failed to comply with the Door-to-Door Trading Act that provides for, amongst other things, a 10-day cooling off period.

The Door-to-Door Trading Act allows consumers who have entered into a contract as a result of a cold call and have not been advised of their rights to a cooling off period to cancel the contract within 6 months of the date of the contract and may be entitled to recover the money paid.

"Consumers should be aware that if they enter into contracts which are directly related to cold calling from businesses then they are entitled to a cooling off period," Consumer Protection Commissioner Patrick Walker said.

"The law requires consumers to be advised of their rights to a cooling off period and they cannot be asked to pay money or receive the services provided during the cooling off period.

"As lending in the housing market slows down, finance brokers will invent other ways of generating business. Consumers should be cautious about refinancing an existing mortgage or consolidating outstanding debts, or they could end up in a financial dilemma" Mr Walker said.

Free budgeting advice is available from qualified financial counsellors and anyone wishing to speak with a financial counsellor can contact the Financial Counsellors Resource Project on (08) 9221 9411 to find out where their closest financial counsellor is located.

Consumers who have any concerns over door-to-door trading or have been ‘cold called’ and need assistance should contact the Department of Consumer and Employment Protection on telephone 1300 30 40 54 or at consumer@docep.wa.gov.au

Joka Group Pty Ltd Prosecuted on 7 Breaches

The Perth finance broking business Home Ownership Company (WA) operated by Joka Group Pty Ltd, its director John Whitely and an employee Paul Matthews have pleaded guilty to a total of 15 breaches of the Door-to-Door Trading Act.

They pleaded not guilty to 4 other charges and sentencing in the Perth Court of Petty sessions has been deferred.

In 2003 a consumer received an unsolicited telephone call from the company offering a debt reduction service. Mr Matthews subsequently visited the potential client at their home and recommended a revolving line of credit with a bank.

They signed a Service Agreement with Home Ownership Company agreeing to pay it $4,400 for the service.

When the client received the loan documentation from the bank, they realised that the loan would not be advantageous to them and decided not to proceed and rescinded the Service Contract with Home Ownership Company.

The company advised the consumer that legal action would be taken against them and the consumer contacted the Department of Consumer and Employment Protection.

The department found that the company had failed to comply with the Door-to-Door Trading Act that provides for, amongst other things, a 10-day cooling off period.

The Door-to-Door Trading Act allows consumers who have entered into a contract as a result of a cold call and have not been advised of their rights to a cooling off period to cancel the contract within 6 months of the date of the contract and may be entitled to recover the money paid.

"Consumers should be aware that if they enter into contracts which are directly related to cold calling from businesses then they are entitled to a cooling off period," Consumer Protection Commissioner Patrick Walker said.

"The law requires consumers to be advised of their rights to a cooling off period and they cannot be asked to pay money or receive the services provided during the cooling off period.

"As lending in the housing market slows down, finance brokers will invent other ways of generating business. Consumers should be cautious about refinancing an existing mortgage or consolidating outstanding debts, or they could end up in a financial dilemma" Mr Walker said.

Free budgeting advice is available from qualified financial counsellors and anyone wishing to speak with a financial counsellor can contact the Financial Counsellors Resource Project on (08) 9221 9411 to find out where their closest financial counsellor is located.

Consumers who have any concerns over door-to-door trading or have been ‘cold called’ and need assistance should contact the Department of Consumer and Employment Protection on telephone 1300 30 40 54 or at consumer@docep.wa.gov.au