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16-132MR ASIC bans a fifth broker from Get Approved Finance
ASIC has permanently banned former Perth-based finance broker Mr Grant Aaron Parker from engaging in credit activities and providing financial services.
ASIC found that Mr Parker, of Alfred Cove, Western Australia, engaged in misleading conduct when brokering motor vehicle financing for four clients in 2012. At the time, Mr Parker was employed as a finance broker for Get Approved Finance of Victoria Park in Western Australia. Mr Parker is the fifth broker from Get Approved Finance to be banned by ASIC.
Get Approved Finance was the trading name of Western Australia-based finance broker Jeremy (WA) Pty Ltd, and operated under its credit licence.
Mr Parker misled vulnerable clients with poor credit histories to believe they would be approved for vehicle finance if their loan applications were supported by guarantors. Mr Parker then dishonestly prepared loan applications solely in the names of the proposed guarantors without those persons' knowledge or consent.
ASIC also found that Mr Parker facilitated the issuing of financial products in his clients' name and inflated loan amounts by selling and financing insurance and warranty products without his clients' knowledge or consent.
ASIC Deputy Chairman Peter Kell said the banning reinforces the strong message to any broker considering engaging in misleading conduct. 'ASIC will not hesitate to permanently remove those who engage in misleading conduct from the industry,' Mr Kell said.
Three former Get Approved finance brokers, Mr Eric-John Pryor, Mr Lachlan McDonald (15-189MR) and Mrs Julie Vanzyl (16-116MR) were also permanently banned and Ms Rana Hepi banned for eight years (15-374MR) from engaging in credit activities or providing any financial services for similar conduct whilst arranging vehicle finance for clients.
In October 2015 Esanda agreed to compensate more than 70 borrowers for car loans organised by Get Approved Finance. The total value of the loans financed was more than $1.38 million (15-312 MR). As at April 2016 this has resulted in the total benefit including refunds of over $570,000 to approximately 60% of these borrowers with the remaining borrowers at various stages of the remediation process.
ASIC's investigation into the conduct of Get Approved Finance and Esanda is ongoing.
ASIC is also continuing to review the sale of insurance products sold in connection with car finance, particularly where they offer poor or low-value benefits to consumers.
For the duration of Mr Parker's employment at Jeremy WA Pty Ltd, Esanda was a division of Australia and New Zealand Banking Group Ltd.
ASIC has published Regulatory Guide 218 Licensing: Administrative action against persons engaged in credit activities (RG 218) and Regulatory Guide 98 Licensing: Administrative action against financial services providers (RG 98). These regulatory guides provide guidance for persons engaging in credit activities and providing financial services on the administrative powers ASIC uses to enforce the credit and financial services legislation. It describes the administrative actions available to ASIC, and indicates the matters ASIC generally takes into account when exercising these powers. The guide explains how ASIC approaches the task of protecting the public and reinforcing the integrity and reputation of the consumer credit and financial services industries.
ASIC has published a recent report about the sale of add-on insurance products sold in connection with car finance.
ASIC's report Buying add-on insurance in car yards: Why it can be hard to say no (REP 470) analysed qualitative research on the experience of consumers who had been sold add-on insurance by car dealers. It found that many consumers who purchased these products:
- had no awareness of add-ons, including their value, before entering the car yard; and
- had already invested large amounts of time, energy and mental effort in buying the car and so, by the time they were offered the add-ons, found it hard to say no to the offer of add-on insurance.
On 1 December 2016, the AAT upheld ASIC's decisions to permanently ban Mr Parker from engaging in credit activities and providing financial services.