ASIC vows 2013 broker crack-down

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ASIC commissioner, Peter Kell, has told Broker TV the organisation will be cracking down on brokers this year, focusing on three primary issues.

“ASIC conducted a study at the end of 2011 on how brokers were travelling in terms of complying with the new legislation and we found that, generally, there was a pretty good understanding of the new legislation – but there were some areas where we thought there needed to be an improvement.”

For example, Kell says brokers need to understand that they have responsibilities when it comes to establishing the customer’s ability to repay or deal with the credit that’s being offered.

“They can’t just rely on, for example, the lenders. So, while we are seeing generally good compliance, it’s very important for brokers to understand that their responsibilities in this area are also quite important to get across. They can’t sort of ‘outsource’ those to others.”

Kell says there are three areas ASIC will be focusing on in the mortgage broking space this year:

  1. Fraudulent material provided on loan applications;

“We’ve already banned six advisers in this area since the new credit legislation came in and we’ve also obtained criminal outcomes against a broker for this sort of fraud.”

  1. Advertising;

“ASIC has signalled a tougher approach to advertising more generally across financial services and that certainly includes credit…We’ve had more than 40 ads in the credit area alone changed in 2012.”

  1. Disclosure

“We want to make sure that disclosure statements, especially around fees and commissions, are accurate – and that includes when commissions that are not only paid by the lender, but by other third parties, for example real estate agents.

“I wouldn’t characterise ASIC’s approach as ‘light touch’. Since the new credit regime was introduced, we’ve cancelled 14 licenses, we’ve banned 12 people from the industry…and we’re continuing with quite a wide range of investigations into different parts of the credit sector.   

Watch the full interview with Peter Kell here

  

  • Broker on 7/02/2013 8:42:57 PM

    Out of 10000 plus brokers, great to weed out the bad eggs , but needle in a haystack stuff, obviously not musch else going on at ASIC at the minute!!!

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