A finance broker has been sentenced in court to 21 months' imprisonment after an investigation into his brokering of motor vehicle finance contracts.
The Australian Securities and Investments Commission (ASIC) held an investigation into Perth man Peter Lachlan McDonald regarding his conduct while an employee of Get Approved Finance.
ASIC’s investigation found that between January 2013 and April 2013, in the course of brokering four motor vehicle finance contracts, McDonald provided the lender Esanda (a business then owned by ANZ) with information that falsely represented that persons, who had in fact only agreed to be loan guarantors, were the applicant borrowers who would ultimately own the vehicle to be financed.
It is alleged that McDonald had previously advised his clients, who had poor credit histories, that they would be approved for vehicle finance if their loan applications were supported by guarantors.
In two further loan applications, McDonald is alleged to have provided information to Esanda that falsely represented that insurance quotes were issued insurance policies, knowing that Esanda required all financed vehicles to be insured before loans were approved.
In one additional application it is alleged that McDonald inserted what purported to be his client's signature on an extended warranty and submitted that document to Esanda, the client having agreed to purchase the extended warranty.
In relation to one of the seven loan applications, McDonald is also alleged to have acted fraudulently by artificially interposing a third party vendor while representing to his client that the vehicle being purchased on credit was being sourced directly from a car dealership. In doing so, he gained a pecuniary benefit for himself.
The sentence was fully suspended for 12 months upon McDonald paying a $5000 bond to the Court. The sentence took into account McDonald’s guilty plea to seven charges of giving false information to Esanda and one fraud charge.
ASIC deputy chair Peter Kell said McDonald’s actions abused the trust of his clients, who are entitled to expect brokers to act honestly and in their best interests.
He said, "Loan fraud, which often involves an intermediary like a finance broker, is a particular focus of ASIC. We are actively working to improve standards in the broking industry and warn anyone tempted to deceive lenders or mislead customers that they will be held to account."
Since becoming the national regulator of consumer credit in 2010, ASIC has achieved significant loan fraud outcomes resulting in 17 convictions for various related offences. Over this time, 83 individuals or companies have also been banned from providing credit services or precluded from holding a credit licence.
McDonald was sentenced on 5 July 2018. The Commonwealth Director of Public Prosecutions prosecuted the matter.