Car dealer, loan broker and lender caught conspiring
ASIC caught three businesses in Cairns working together to scam customers.
The Federal Court has issued a $776,000 fine to the sole director of a lender and broker for breaching consumer credit laws. The court found the lender Channic Pty Ltd and loan broker Cash Brokers Pty Ltd, both owned by Colin William Hulbert, operating unjustly. Hulbert will be required to pay over $1.2 million for the operation.
The misconduct involved Cash Brokers helping customers get loans from Channic at 48% interest in order to purchase vehicles at a used car dealership in Cairns, which was also owned by Hulbert. Cash Brokers would then charge brokerage fees of either $550 or $990 which were included in the loan amounts.
The Australian Securities and Investments Commission (ASIC) deputy chairman Peter Kell said, "The penalty awarded by the Federal Court is not just condemnation of this misconduct, but is a warning to other lenders who might consider pursuing profits at the expense of their obligations to customers."
Coming off the back of last week's crackdown on payday loans, this most recent fine serves as a timely reminder that ASIC will investigate unfair lending practices.
However, the case involving Channic only got on ASIC's radar when the regulator was alerted by the Indigenous Consumer Assistance Network. As it can take time for ASIC to catch scams, it's important to be aware of your rights as a consumer to avoid them yourself.
If you're looking for a loan, it's a good idea to get a sense of the rates and options available, making it easier to spot any loans which are either too good to be true, or have such poor terms that they should be avoided at all costs.