Following an investigation, ASIC has banned Mr Fernando Morais of Carlingford, NSW, from engaging in credit activities for ten years and cancelled the credit licence of Mr Morais' company, Sanfern Pty Ltd (Sanfern).
The ASIC investigation found that between August 2011 and November 2011 Mr Morais contravened credit legislation by recklessly providing false documents to BMW Australia Finance Ltd trading as Alphera Financial Services (BMW) in relation to applications for credit he made on behalf of others.
ASIC made these findings on the basis of five applications for consumer credit which involved false documents provided recklessly by Mr Morais to BMW. Mr Morais did not consider that he was under any obligation to make any inquiries or checks into the accuracy of documents forwarded by him to BMW in support of applications for credit to BMW.
ASIC also found that Mr Morais created false documents in respect of two business purpose car loans he brokered not covered by the Credit Act. This conduct, as well as the provision of false documents to BMW in relation to credit applications for five clients, resulted in ASIC's decision that Mr Morais is not a fit and proper person to engage in credit activities.
ASIC Deputy Chair Peter Kell said ASIC's action against Mr Morais' sends a strong message to any broker considering behaving dishonestly or recklessly. 'When we find individuals engaging in such misconduct, ASIC will not hesitate to remove them from the industry.'
ASIC has cancelled the Australian Credit Licence number 384031 held by Sanfern after finding that Mr Morais is a director of Sanfern and is also the sole key person listed on the Licence.
Mr Morais has a right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.
Since becoming the national regulator of consumer credit in 2010, ASIC has achieved significant loan fraud outcomes, with criminal proceedings being launched against 11 people, resulting in seven convictions for various offences and four defendants currently before the courts. Forty-six individuals or companies have also been banned from providing credit services or precluded from holding a credit licence (including 20 permanent bans or cancellations).
For further information about ASIC's role in enforcing the law in relation to persons engaged in credit activities, ASIC has published ASIC Regulatory Guide 218 Licensing: Administrative action against persons engaged in credit activities (RG 218).
There is an obligation on credit licensees to take reasonable steps to verify information regarding a consumer's financial situation prior to conducting a preliminary assessment of the suitability of a consumer for a loan, as set out in ASIC Regulatory Guide 209: Responsible Lending Conduct (RG 209).