The MFAA has finally come out to warn brokers specifically about the activities of Buy a Trail and its director Mark Whittingham, following a warning issued by the Director of Consumer Affairs Victoria.
Following long-running coverage by Australian Broker that detailed multiple accounts of brokers left out of pocket by Whittingham's business Buy A Trail, the MFAA has come out and named the business for its membership following a public warning from Consumer Affairs Victoria.
Previously, the association had published multiple warnings to brokers who were looking to purchase trail books asking them to beware in these transactions, but failed to name the specific business for legal reasons. Aggregators were also reluctant to name the business.
A public warning issued by Consumer Affairs Victoria in September and republished by the MFAA in Mortgage and Finance Brief indicated that brokers should steer clear of Buy A Trail.
"The company and Mr Whittingham sent unsolicited emails to brokers regarding the sale of loan trail books," the warning from Consumer Affairs Victoria read.
"Consumer Affairs Victoria has received information that Mr Whittingham asks for a deposit from interested brokers and has received deposits ranging from less than $10,000 up to $60,000.
"Information packs provided by Mr Whittingham to brokers specify that the deposit is fully refundable if the prospective purchaser decides not to buy the loan trail book."
Consumer Affairs Victoria added that Buy A Trail director Mark Whittingham also regularly makes representations to prospective buyers that he will place their deposit money in a trust account.
"Despite these representations a number of brokers have reported that the deposits have not been returned in full, or at all, despite many requests," the statement read.
Buy A Trail is now in liquidation, after the Federal Court in NSW ordered that the company by wound up in August. Clients of the company may submit claims against the company with the liquidator for consideration.