ASIC on the hunt for unlicensed mortgage brokers
ASIC has received strong support from mortgage brokers after launching a campaign targeting unlicensed practitioners.
Since June 30, 2010 all individuals or businesses that engage in credit activities are required to hold an Australian credit licence, or be an authorised representative of a credit licence holder.
The campaign will run until March 30, 2012 and follows a previous ASIC surveillance program between October 2010 and February 2011 to find credit providers that were not appropriately registered.
As at June 30, 2011, 6,081 businesses that provide credit services have obtained an ASIC licence.
Phil Naylor, CEO of the Mortgage and Finance Association of Australia, says the organisation is “very supportive” of the ASIC campaign.
“The MFAA requires members to satisfy its requirements at each annual membership renewal, and we conduct random audits from time to time,” he says.
Gerald Foley, managing director of Melbourne-based National Mortgage Brokers, says the firm has already received a letter from ASIC asking for licensing information and has responded to the request.
“I think it’s a good idea. It means everyone is aware of licensing and their obligations,” Foley tells Property Observer.
“With some people it does not hit home until there is an audit or a review. The ASIC approach is a very positive one.”
The latest campaign is aimed at identifying traders who applied for a credit licence but withdrew their application or had it refused. In those circumstances, unless the trader is an authorised credit representative or subsequently obtains a credit licence, he or she cannot engage in credit activities.
“ASIC will identify and may later prosecute individuals and businesses who fail to make sure they’re properly licensed or authorised under the regime,” says ASIC commissioner Peter Boxall.
“Engaging or utilising the services of unlicensed credit operators puts the public at risk. Consumers need to be confident that they’re dealing with authorised businesses who are gatekeepers of our financial services industry,” he adds.
Consumers wishing to confirm the broker they have engaged is licensed can search ASIC’s registers at www.asic.gov.au/search.
Complaints concerning individuals or companies suspected of trading without a credit licence or authorisation can be lodged with ASIC here.
