Issue Date:  -  Monday, 17 January 2005

City Finance (WA) Pty Ltd guilty

Finance Broker City Finance (WA) Pty Ltd and O.P.E.S. Group were prosecuted on Friday 14th January on 10 charges in the Perth Court of Petty sessions.

The companies have been convicted on a combined total of 10 breaches of the Door-to-Door Trading Act and the Fair Trading Act.  Licensed broker, Iain Melotte, operates both companies.

They were fined a combined total of $4,750.

“A Perth couple received an unsolicited telephone call from City Finance (WA), with an offer to provide services relating to a debt reduction strategy.  The consumers accepted the offer believing that it would significantly improve their financial position”, Consumer Protection Commissioner Patrick Walker said.

The couple became concerned when all the documentation they were given to sign was in the name of O.P.E.S. Group.  The couple also felt that they were being pressured into refinancing their home, without having an opportunity to assess either the benefits or costs of the debt reduction strategy.

“They consequently rescinded this contract in line with the provisions of the Door-to- Door Trading Act and contacted the Department of Consumer and Employment Protection”, Mr Walker said.

Consumer Protection discovered that the company had made false statements by including a clause in the contract which waived their right to a cooling-off period and that the couple had not been provided with other documentation concerning their rights under the Act.

"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 10 day cooling off period and they cannot be asked to pay money or receive the services provided during this period.

“This is the second finance broker convicted recently and Consumer Protection is currently investigating a number of others. Consumers should be cautious about refinancing an existing mortgage or consolidating outstanding debts unless the benefits can be clearly demonstrated,” the Commissioner said. 

In a separate matter, the Finance Brokers Supervisory Board recently reprimanded and fined Mr Melotte and City Finance (WA) Pty Ltd for charging fees in excess of that permitted by law.

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 .