Powered by MOMENTUM MEDIA
subscribe to our newsletter sign up

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

$9m fine for firm after consumers lost big in super

Businessman in handcuffs

A Victorian financial services and credit business has been ordered to pay almost $9 million for contravening a number of obligations and consumer protection laws, which saw some consumers lose up to 30 per cent of their superannuation balances.

Melbourne-based Financial Circle has been ordered to pay penalties totaling $8,980,000 after it participated in multiple breaches of financial services, credit and consumer protection laws. 

According to ASIC, the business offered consumers personal loans of up to $5,000 on the condition that clients consented to receiving and executing financial advice. Such advice commonly included buying personal insurance products and changing superannuation providers.

Once this advice was implemented, substantial advice fees were paid to Financial Circle straight from the consumer’s superannuation account. The business also obtained ongoing commission payments from the insurers.

Advertisement
Advertisement

The court found Financial Circle liable for making false and misleading representations and engaging in misleading and deceptive conduct; engaging in unconscionable conduct; engaging in credit activity without an authorised licence; and breaching its licensee obligations under its Australian Financial Services Licence (AFSL).

This included failing to meet the obligation to take reasonable steps to ensure its authorised representatives acted in clients’ best interests and offered appropriate advice, as well as not ensuring that the financial services covered by its AFSL were provided efficiently, honestly and fairly.

In addition to the monetary penalty, the Federal Court ordered Financial Circle be permanently banned from carrying on a financial services business and providing credit or entering into a credit contract as a provider.

$9m fine for firm after consumers lost big in super
Businessman in handcuffs
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
Cynic - Do you think this wasn't considered when Mr Morrison took 4 months to set the election date? It is out of our control to deliver this year. Ha!....
Anonymous - Bulldust. This sounds like leftist badmouthing the government as the ASTO has already said that even if the legislation is passed after 1 July 2019 it.......
Anonymous - Happy days are here again for all the aspirational battlers and retirees who will not be ripped off by Labor's Tax grab.....
MelbMan - We dodged a real bullet with Saturday nights Federal election result. ....