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Thursday 11 May 2017

17-134MR ASIC acts against car yard loan-writer

ASIC has permanently banned Adam Edward Greene from engaging in credit activities. Mr Greene wrote and submitted loans for customers buying vehicles from Combined Motor Traders, a Cranbourne used-car dealership, between 2014 and 2015.

ASIC found that four loans submitted by Mr Greene and approved by Esanda, a division of ANZ, contained false information and two of those loans contained false documents that were not given to him by the applicants.

'Using false information to get a loan for a customer who might not be able to afford it is not a smart sales tactic - it is illegal,' ASIC Deputy Chair Peter Kell said.

'This is not the first time ASIC has identified this type of conduct with car loans. Lenders need to look very carefully at the way they manage the approval of these types of loans, including the way in which car yard employees provide assistance to consumers to obtain finance.'

'If their commission structures are encouraging illegal practices, they should make changes.'

Car dealerships may operate under an exemption, commonly known as the ‘point of sale’ exemption (POS exemption). The POS exemption allows a car dealership to provide assistance to consumers to obtain finance from licensed credit providers. The proceeds of the finance can only be used to pay for goods and services supplied by the dealership.

ASIC's investigations are ongoing. See 16-456MR.

Mr Greene has the right to seek a review of ASIC’s decision to the Administrative Appeals Tribunal.

Background

ASIC has taken actions against a number of other loan-writers, representatives or brokers operating in the car finance market, for conduct such as:

  • Obtaining cars for consumers with poor credit histories, by arranging for a third party to sign the loan contract as a borrower (when that person thought they were only a guarantor).
  • Arranging for the consumer to buy a car at an inflated sale price, and obtaining a secret profit from the markup in price.
  • Financing insurance and warranty products without the knowledge or consent of the consumers.

 Examples of related outcomes include:

  • Permanently banning four brokers: Mr Eric-John Pryor, Mr Lachlan McDonald (15-189MR) and Mrs Julie Vanzyl (16-116MR), Grant Parker (16-132MR).
  • Banning a broker, Ms Rana Hepi, for eight years (15-374MR).
Last updated: 30/03/2021 09:32