Issue Date:  -  Wednesday, 12 April 2006

Unlicensed Finance Broker guilty

Mortgage Minimiser (Australia) Pty Ltd has been ordered by the Perth Magistrates Court to pay compensation of over $21,000 to a number of former clients in relation to ten charges of receiving payment for finance broking services without a valid licence.

Mortgage Minimiser was also fined $6,000 and ordered to pay costs of $1,000 in relation to these ten offences and a further one offence of carrying on business as a finance broker without a valid licence

Consumer Protection received a complaint from a Warnbro couple regarding a loan that was refinanced by Mortgage Minimiser with the intention of improving their financial position.

“These people were placed into a ‘split line of credit’ loan, which attracted huge fees and charges.  They did not understand the ramifications of this loan product and have since been forced into refinancing these arrangements yet again,” Consumer Protection Commissioner Patrick Walker said.

Companies found guilty of unlicensed finance broking can face maximum penalties of up to $250,000.  Penalties of up to $250,000 also apply to licensed finance brokers that contract with other persons to carry on finance broking activities that are not licensed.

Western Australian laws require that licensed finance brokers be suitable persons to operate in the industry and have appropriate qualifications and experience.  Brokers are also required to comply with a Code of Conduct, which requires them to act in the customer’s best interests.  An unlicensed finance broker is precluded from receiving remuneration.

“There is a high risk to consumers when finance brokers are not licensed and Consumer Protection will remain vigilant and committed to pursuing those who flout the law.  We are also keen to enure that there is a level playing field for all brokers and that the reputation of the industry is not tarnished by unlicensed operators,” Mr Walker said.

Details of licensed finance brokers can be obtained by telephoning Consumer Protection on 1300 30 40 54 or by visiting website www.docep.wa.gov.au/financebrokers .

Media Contact:

Mike Winchester
9282 0961
0409 118 982