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Tuesday 25 November 2014

14-312MR ASIC cancels credit licence and bans director for 10 years

ASIC has cancelled the Australian credit licence (credit licence) of Net Finance (Corp) Pty Ltd (Net Finance) and banned its director, Mr Graham Tandy, from the credit industry for 10 years.

A second employee responsible for the day-to-day operations of Net Finance, Mr John Murphy, has been banned for eight years.

An ASIC investigation found Net Finance, based in Slacks Creek, Brisbane, failed to provide credit activities honestly, efficiently and fairly. Net Finance induced a consumer to make a false business declaration when applying for a loan by requesting a handwritten note falsely setting out that the loan was for business purposes.

ASIC's investigation found Net Finance did not make relevant inquiries and assessments, and assisted a consumer to obtain a loan which was unsuitable. The consumer was forced to sell his home when he could not meet his obligations under the loan.

Net Finance also failed to provide credit guides, credit quotes and credit proposal disclosure documents to its clients, all of which are required under the law.

Mr Tandy and Mr Murphy were both found to be involved in the breaches by Net Finance and not be fit and proper persons to engage in credit activities.

Deputy Chairman Peter Kell said, 'Individuals in trusted positions must ensure they understand and adhere to their obligations.

'Those who fail in this regard will be removed from the industry'.

Background

Under the National Consumer Credit Protection Act 2009, credit providers are required to take reasonable steps to ensure the suitability of a consumer's contract. Regulatory Guide 209 Credit licensing: Responsible lending conduct (RG 209) sets out ASIC's expectations in relation to responsible lending.

Last updated: 25/11/2014 12:00