In a statement, ASIC said an investigation had found that MyBudget, which holds an Australian Credit Licence, was “providing services to its clients via a non-cash payment facility, which would require the company to hold an AFS licence”.
MyBudget customers are provided with a budget plan to meet their financial objectives and goals, and clients then deposit their income into a MyBudget account, which facilitates the distribution of funds in accordance with the plan.
ASIC said the company had been brought to its attention when it suffered a ransomware intrusion that meant 13,000 clients were unable to access their online account for at least seven days.
“ASIC was particularly concerned about unlicensed financial services conduct by an entity providing debt management services during the COVID-19 pandemic, when more consumers may face financial hardship and seek budgetary and related assistance,” the regulator said.
ASIC said the company had now applied for an AFSL and the regulator was assessing the application.
I’m curious does the client money for bills that MyBudget receives then redirects go FIRST into a trust account or just an ordinary business account? If the later, then surely its the same thing Melissa Caddick did? “…deposit their income into a MyBudget account, which facilitates the distribution of funds in accordance with the plan”. Maybe it should get a banking license as well??
The irony in all of this of course is that once MyBudget gets their AFSL they will then need to comply with all of the regulations that go with that. It simply won’t be practical or affordable to offer advice to their target market, who probably do need help.
I don’t consider this is worth bashing either MyBudget or ASIC. If they close down MyBudget it will hurt 13,000 people who are trying to look after themselves. ASIC is quite sensible here giving MyBudget time to fix up their mistake.
Surely you think ASIC should have heard of My Budget before last week? I can accept your commentary re My Budget but ASIC have proven themselves to be incompetent again.
ASIC it seems is very good a having no idea or being unaware of many things – just ask Daniel Press. When you think about the budget and staff of ASIC, they clearly must go to considerable measures to shield themselves from the outside world – but they seem to manage it.
So my Budget has been around since 1999 such a good catch -not ASIC -reminds me of the 3 monkeys see no evil , hear no evil and see no evil
MyBudget should have been properly investigated long ago for their practices. I’ve spoken with many advisers over the years who were helping clients pick up the pieces and recover their financial wellbeing after using MyBudget. More than one family left with a so-called “budget” that barely allowed enough to meet the most basic living expenses. I find it hard to believe the regulators didn’t know they existed when the complaints must have been piling up.
So an Adviser inadvertently breaches a minor rule like giving a client what they need & want (but may be in the opinion of a non-financially qualified ASIC analyst and/or delegate not be as they’d have advised them to have) or misses a FDS statement date by a few days and they can lose their license, their job, their home, AND be publicly shamed as if a criminal BUT a corporate can provide financial services without any license whatsoever and ASIC work with them to help them improve? Do no politicians read these stories and realise what a pathetic, overpowered, biased, anti-adviser, underperforming, double-standard bearing, gestapo-like organisation ASIC is??
Well Said! Even worse are real estate agents who advise people to buy property using their SMSF’s I have witnessed that first hand many times.
So let me get this straight: MyBudget have flagrantly broken the law, and ASIC are thinking about giving them an AFSL?
Am I missing something?
Don’t forget they never realised MyBudget existed until the ransomware attack happened.
ASIC was asleep at the wheel as usual
They could pretty much provide financial advice as much as they want but as soon as they use a product they get pinched! No wonder the ASIC levy is increasing, only the honest financial advisers are paying it!
I doubt that if I’m ever found to have breached the Corps Act that ASIC will “work with me” to rectify the breaches….It’ll be a fine, a banning, named & shamed….
Budget Direct stopped being a Debt Management organisation when their clients started making investments based on advice from Budget Direct – a housewife providing financial advice – me thinks NO
Are BudgetDirect and MyBudget the same mob?
I actually quite like the MyBudget concept. They have had a reasonably high profile and their services were quite clearly within those that require an AFSL. Yet “[i]ASIC said the company had been brought to its attention when it suffered a ransomware intrusion that meant 13,000 clients were unable to access their online account for at least seven days[/i].” What the hell do they do during the day?
They also aren’t on social media obviously
Am I reading it correctly that if you are now found to be giving advice without a licence that ASIC with not punish you in anyway, and in fact will help you apply for a licence. If only licenced advisers got the same helpful approach from ASIC, instead of the name, shame, ban and prosecute approach. Its time for everyone to hand back their licences and start flogging crypto, ASIC is only interested in punishing those trying to do the right thing.
Yeh ASIC sounds like a long and expensive investigation and assessment.
That’s fine Real Advisers will pay for it yet again.
What a most disgusting ASIC funding levy model Frydenberg & LNP have implemented.
Out with Frydenberg and LNP.
LNP are doing what they should. Labor would be an absolute disaster. ABSOLUTE
Do you honestly think any politician is in control of these gov’t departments/institutions any more?
The permanent bureaucrat class know very well how to manipulate, bully, coerce politicians….and possibly worse.
Team the bureaucrats up with politicians who’ve never had a real job outside of uni/media/policy adviser/union/law firm/public service and we are in a world of even more pain than now.
If we don’t take back control of the govt (‘public service’ institutions), they will control every part of our lives.
I’m assuming that, despite clearly providing FINANCIAL SERVICES, myBudget was not required to hold a FINANCIAL SERVICES licence because the Corps Act doesn’t know the difference between financial products and SERVICES, and ASIC is just as clueless
#scrapchap7
Glad to see our ASIC levy is being put towards these type of matters. What an absolute joke lol.