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Breaking News: Broker banned for failing to lodge compliance certificates

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Australian Broker | 15 Oct 2013, 06:00 AM Agree 0
A South Australian broker has been banned for six months following an ASIC investigation
  • Silent | 15 Oct 2013, 11:52 AM Agree 0
    The First part there is no excuse.. But does this mean that Brokers arent allowed to charge for their service and if they do and clients signs and agrees..does this mean there is no way a Broker can enforce it?
  • Ray-Perth | 15 Oct 2013, 12:17 PM Agree 0
    Heavens, are there still brokers out there who think the ACL is a joke ? Good on ASIC for keeping the industry respectable
  • Ray-Perth | 15 Oct 2013, 12:19 PM Agree 0
    Silence .. it is most likely that the broker had not notified the client upfront in writing of any fee and had no signed agreement / authority for the charging of any fee.
  • Common sense | 15 Oct 2013, 12:23 PM Agree 0
    Perhaps the word "threatening" is the issue. Intimidation in any field is wrong. If he is legally allowed to lodge the caveat, then there is no need for a threat of such action - just do it. Of course, it needs to be weighed up with whether or not it's worth it or even a method of receiving his fees. I would hope that there would be better ways to negotiate with your own clients on payment requirements. As many experts point out, often the amount of funds is not an issue, it's when the client/s are unaware or poorly briefed on costs due - when the break down usually occurs. In this case, was a basic "quote" even provided? Why was the client unwilling to pay the fee? What is the real story behind this issue?
  • PeterT | 15 Oct 2013, 12:27 PM Agree 0
    A ban for failing to lodge a bit of paperwork seems a bit harsh, surely a fine would be more appropriate? Did the broker actually do anything wrong by the clients? The caveat may have simply been the response to a client refusing to pay a previously agreed to fee.
    This actually suggests that ASIC is more concerned about good paperwork, rather than consumer protection.
  • Broker Tony | 15 Oct 2013, 12:52 PM Agree 0
    It is interesting that ASIC discovers a breech of regulations at the same time as presumably a consumer complaint is made! If I was skeptical I would be wondering if the complaint was what triggered the discovery of the compliance breech. Either way brokers threatening customers is not good for the industry so good on ASIC for getting tough on the perpetrator. I think it also shows that brokers should ensure their conduct does not attract attention! Keep it clean guys!
  • mac | 15 Oct 2013, 01:33 PM Agree 0
    Just had a look at the web site....Would have been a complaint from some poor stiff for sure.......
    "Gryphon Financial has built a reputation from helping those in need. Circumtances (sic) always seem to change and not always for the best and we cater for those changes. When your debts are rising and you are having difficulty making payments. If they become un paid leading to defaults and or judgements, we can help. If you find your self with mortgage arrears which may lead to the mortgagee taking legal action possibly possession, we can help. The Banks don't like bad credit but we do, our solutions can be short term or long term. Our focus is to resolve your current problems, take the pressure from you, assist you with changing your circumstances. No more uncontrolled debt, mortgage arrears, those phone calls and knocks at the door."
  • Jim S | 15 Oct 2013, 01:38 PM Agree 0
    National Consumer Credit Protection Bill applies here AND standard MFAA policy? Guys, Brokers are not permitted to lodge caveats to secure fees!!
  • Silent | 15 Oct 2013, 02:38 PM Agree 0
    So how would a Broker, who gets the right form signed to charge a fee..enforce it?
  • Wilko | 15 Oct 2013, 02:58 PM Agree 0
    No MFAA policy here. He is a FBAA member and I dont think this is an issue.

    Clearly the wrong thing has been done and the penalty issued. We keep kidding ourselves if we believe that brokers are not an easy target for ASIC. Make more use of your industry association and the support of your aggregator would be my advice.
  • Dah, what a dummy | 15 Oct 2013, 03:46 PM Agree 0
    A caveat. A threat. All bad practice. And yes, you can charge a fee for service. But your recourse for non-payment is a statement of claim in the civil courts, as with all debt recovery matters in service related industries.
  • mac | 16 Oct 2013, 10:30 AM Agree 0
    You are only legally allowed to lodge a caveat if you have an interest in the equity of a property. Not because someone owes you money. Also it is expressly noted a no no in the credit licensing regime I believe.
  • Alex Dryden | 18 Oct 2013, 12:19 PM Agree 0
    Thank you all for your comments. Just to clarify for you. There was no customer complaint. I was chosen at random as my office id almost directly across the road from ASIC. They advised me they were reviewing small business and I was just across the road. During the review they had two concerns. firstly I had a caveat clause in my mandate. I use the same mandate for Private Funding, commercial as well as coded loans. The clause has never been acted on and ASIC also made this comment in their reply back to me. Once the issue was identified I removed it from my coded mandate. I was unaware of this issue, it is not in the regulations it is buried in the act. Second concern was I hadn't lodged my compliance certificate. The reason for this was, I was waiting for the outcome of the review so that I could resolve any issues prior to lodging, this would ensure compliance. So this was purely an honest mistake that I rectified once I was told it by ASIC no caveat. I hold a current compliance certificate, which has been paid for and approved. It was late thats it, due to the review. the caveat clause removed. So its disappointing that I have been banned. My business has a good reputation and has been going since 2006. Just thought I would clear the air.
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