ASIC has accepted an enforceable undertaking from a company it found engaged in unlicensed credit activity.
The regulator has announced it accepted an enforceable undertaking from Franchelen Pty Ltd for providing loans before being licensed to do so. The company has since applied for and obtained a credit licence.
The company, created by Kawana Island Properties to allow buyers of its Ocean Reach development to complete their contracts, provided loans totalling $7m to 49 purchasers.
The enforceable undertaking requires the company to limit its engagement in credit activity to the management and finalisation of the 49 loans it provided, cap interest payable on those loans at the rate last negotiated with the individual borrower and engage an independent consultant to review the company's compliance with credit legislation and any credit licence conditions.
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