Issue Date:  -  Thursday, 30 March 2006

Finance broker disciplined for overcharging clients

Licensed finance broker of seven years Williams Financial Services Pty Ltd of Aberdeen Street Northbridge, and its director Anthony Glen Williams have been disciplined for breaches of the Finance Brokers Control Act relating to overcharging.

 Mr Williams received a formal reprimand and was also fined $250 with costs of $1,000 by the State Administrative Tribunal.

A Perth couple contacted Mr Williams and requested that he arrange a loan for them.  At Mr Williams’ request, the couple paid him a fee of $300.  When Mr Williams received the pre-approval for the loan he contacted the couple and requested a further payment of $1,000 but they could only afford to pay another $500. 

“Finance brokers who operate in Western Australia are licensed and are bound by legislation that caps the maximum remuneration they can receive.  A finance broker is precluded from charging more than $250 for a non-refundable loan application fee,” Consumer Protection Commissioner Patrick Walker said.

“The couple contacted Consumer Protection which resulted in an investigation and ultimately these proceedings.  We are sending a clear message to the industry that the actions of unscrupulous finance brokers will not be tolerated.  A broker of Mr William’s experience should have known better than to exploit his customers.  

“Finance brokers receive commission from the lenders and are required to disclose to their client all remuneration received, including soft dollar incentives, such as bonus offers.  Many finance brokers are comfortable with the commissions they receive from the lenders and, therefore, do not charge a fee to the client,” Mr Walker said.

Mr Williams refunded all of the fee money to the consumers concerned after the consumer instituted Small Claims Tribunal proceedings.