Former director of mortgage broking firm hit with $7,500 civil penalty for operating without a credit licence

ASIC has flexed its muscles as credit watchdog imposing its first civil penalty on the former director of an unlicensed mortgage broking firm since assuming the role as national regulator for consumer credit in July 2010.

The $7,500 penalty was imposed on Nathan Elali, of South Hurstville by the Federal Court in Sydney on 31 August.

The court found that Elali, was the sole director of a company formerly known as EasyChoice Home Loans Pty Ltd (EasyChoice), when it advertised on its website for more than a year that it provided home and investment property loans when it did not hold an Australian credit licence.

“As the sole director of the company during the period, Mr Elali was found to have been knowingly concerned in the company’s contravention of the National Credit Act,” said ASIC.

Despite repeated warnings by ASIC to remove the advertising, the company did not respond.

The material was removed only after ASIC had commenced court action.

“Where ASIC identifies a possible breach of the consumer credit laws, our first step will often be to require the company to take action to ensure the contravention ceases,” said ASIC Commissioner Peter Kell said:

‘If the company fails to comply, we are prepared to commence civil penalty proceedings as part of our approach to enforcement.’

Under the National Credit Act, individuals or businesses who engage in credit activities are required to hold an Australian credit licence, or be an authorised representative of a credit licence holder.