Nova Home Loans exiled as licence cancelled

by Ben Abbott29 Feb 2012

Sydney-based finance broking firm Nova Home Loans has had its credit licence cancelled by regulator ASIC after a period of not being a dispute resolution scheme member.

Nova, which was expelled from membership of the Financial Ombudsman Service in June 2011, failed to obtain membership from the other approved scheme, the Credit Ombudsman Service.

When ASIC became aware of this, the regulator said it took steps to cancel Nova's credit licence.

"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’, ASIC commissioner Peter Kell said following the licence cancellation.

Nova Home Loans is a Sydney-based finance brokerage, that purports to service clients throughout Australia via a network of "fully qualified and trained home loan agents".

However, following the ASIC announcement yesterday the business' website has been inaccessible to the public. The business could not be contacted for comment.

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

However, its period without an EDR scheme membership entitled ASIC to cancel its licence under the NCCP regime, which requires all credit licencees to be EDR scheme members.

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

FOS would not comment on the reasons for Nova Home Loans' expulsion. Businesses can be expelled from FOS for a number of reasons, including failing to comply with its constitution, failing to comply with a FOS decision, or failing to pay monies owed to the dispute resolution scheme.

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COMMENTS

  • by ozboy 29/02/2012 9:37:53 AM

    "When ASIC became aware of this, the regulator said it took steps to cancel Nova's credit licence." So you have to wonder what took so long? Does the Ombudsman not have a process for notifying the regulatory body about expulsions in a timely manner? How long does it take for ASIC to act once/if notified?

  • by Wes 29/02/2012 10:51:21 AM

    I'm sick of these sabre rattling stories from ASIC, EDRs, associations about compliance. I get it. Stop trying to outdo each other telling your stories about how tough you are and start supporting the 99.9% of the industry who are not only doing the right thing and trying to stay on top of this regulatory environment but also providing a wonderful service which is now being seen by the public as a great alternative to going direct. Bloody agendas ! No better than the politicians I say !

  • by Country Broker 29/02/2012 11:01:09 AM

    ozboy is correct what took so long? NOVA was expelled in June 2011for FOSL and it has taken ASIC 8 months to act. As a licence holder I need to know ASIC is working hard to keep the idustry clean and compliant. Why so consumers have confidence in the NCCP and know that when they deal with a NCCP licenced company they can do it with confidence.