Financial Circle was found to have engaged in numerous contraventions of financial services, credit and consumer protection laws.
The company was restrained from carrying on as a financial service business in January this year after ASIC obtained an order pending investigation.
Financial Circle offered personal loans of up to $5,000 to consumers that could only be obtained if the consumer agreed to receive and implement financial advice.
The advice typically recommended purchasing personal insurance products and switching super providers.
When the advice was implemented significant fees were paid to Financial Circle directly from the consumer’s superannuation.
The business also received ongoing commission payments from the insurers.
The process resulted in substantial erosion, in many cases up to 30 per cent, of the clients’ super balances.
The court found by conducting this business, Financial Circle had made false and misleading representations and engaged in misleading the deceptive conduct.
The court also found it had engaged in unconscionable conduct and had breached its AFSL obligations, including obligations requiring that it take reasonable steps to act in a client’s best interest and provide efficient and honest financial services.
It was also found that Financial Circle had engaged in a credit activity without a licence.
In addition to the $8,980,000 fine, the company also must pay ASIC’s costs and has been permanently restrained from carrying on a financial services business and providing credit or entering into a credit contract as a credit provider.
Interesting that a group like this is hit with a 9 mill fine, and yet if ASSic ever got off their asses and looked properly at the ISA funds, they would find far more issues and deceptive conduct than the ones cited above! How about the two Cbus superannuation advisors giving false and misleading evidence to the 2015 Union RC over claims they gave the CFMEU the names and personal details of more than 300 members when the union was embroiled in a national dispute with Lis-Con Concrete Constructions over its failure to make superannuation payments to workers, or the dodgy dealing with Australian Super and its conflicted vertically aligned property deals that are now looking like that fund freezing assets? Pretty sure the impact is much worse than a few $5000 loans and expensive planning fees for a limited number of clients!! Wake up ASSic and get your head out of your a##!!
Were they are degree qualified, did a $10,000 ethics course from FASEA , had a 43 page SOA and had 30 CPD points each? compared at least 12 Different Insurances and 18 different super funds, were members of the FPA , Ifa , FOS , ACL , …..Blah >>> blah ……Blah ….No wonder the profession is in the SHIIII
The company being who ? Ohh no names please ASIC , we want them to pop p with a new ACL next week . Why don’t we black ban and fine the masterminds not the $1 company !!!! Directors guarantee insurance and PI will pay for it . No wonder he lives in Toorak ??
So there AFSL has been revoked however they are still allowed to operate as an ACL holder. Looks like the left hand isn’t talking to the right hand. MFAA doesn’t seem to mind either….