Sydney finance broker Nova Home Loans stripped of credit licence

ASIC has stripped Sydney finance broking firm Nova Home Loans Pty Limited (Nova) of its credit licence after it was expelled from membership of the Financial Ombudsman Service Limited, one of the two external dispute resolution (EDR) schemes approved by ASIC, in June 2011. 

“Nova failed to obtain membership of the other approved EDR scheme, Credit Ombudsman Service Limited, and when ASIC became aware of this, it took steps to cancel Nova’s credit licence,” said the regulator in a statement.

As a result Nova will no longer be able to engage in credit activities. 

Under the National Consumer Credit Protection Act 2009, credit licensees are required to be members of an ASIC-approved EDR scheme. 

EDR schemes are independent and impartial dispute resolution services, which give consumers alternatives to legal proceedings for resolving complaints with their credit service providers.

“Membership of an EDR scheme is an important requirement for Australian credit licensees, and as the consumer credit regulator ASIC will not hesitate to act against those who fail to comply with their responsibilities,” says ASIC commissioner Peter Kell. 

On December 9 2010, Nova was granted a licence to engage in credit activities relating to credit contracts, consumer leases, related mortgages and guarantees, and credit services.

Nova has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.