MFAA warns brokers against 'predatory' lenders

by Mackenzie McCarty28 Aug 2013

Commercial finance brokers are being warned to watch out for ‘predatory’ lenders, with MFAA president, Phil Naylor, saying some broker members have noticed ‘sharks’ circling in the sector.

“It’s mainly in the commercial finance area – not so much the mortgage area – and it’s a trend that members on our…commercial finance panel committee have noticed,” Naylor tells Australian Broker.

While the MFAA isn’t able to provide any names due to defamation laws, Naylor says the fact that there’s no regulation in the commercial area is likely attracting unscrupulous lenders.

“We’re in a [tight spot] because we lobby very strongly to the government that there shouldn’t be any regulation in commercial finance. It just shows there are some small lenders on the fringe, in the commercial area, who are acting in a predatory way.”

He’s also quick to note that brokers are not believed to be working alongside the shady lenders, but rather are being duped right alongside their clients.

“Basically, the modus operandi is to charge large up-front fees and then not deliver and unfortunately, the client gets burned - but the broker who’s caught in the middle gets burned as well,” he says.

“The reason it’s come to our attention is brokers are complaining about [the lenders] because they’re concerned that they’re ripping off customers, but also giving the broker a bad reputation because…the consumer feels that somehow the broker’s let them down.”

The MFAA plans to publish an article in the October edition of their magazine, outlining how commercial finance brokers can identify dodgy lenders and avoid them.


  • by Old Joe 28/08/2013 10:02:32 AM

    Phil its important that you get onto how these guys are communicating with brokers via spam email and the distribution of lists that are against the spam act.

  • by ozboy 28/08/2013 10:20:54 AM

    Perhaps the MFAA could offer some insights into how they present their offer and what to look for when dealing with these people. Unfortunately the comment "Basically, the modus operandi is to charge large up-front fees and then not deliver" doesn't narrow it down.

  • by Country Broker 28/08/2013 11:16:16 AM

    This has been going on for years and keeps coming up every so often , best basic approach, if it too good to be true and a hefty up front fee is being charged to get to that "too good to be true" loan , STAY AWAY !

    Clients can always go the ACCC about conduct which is plainly dishonest ( good Luck ) ! ASIC only have NCCP authority .