Financial Circle faces court for ‘unconsionable’ conduct
The Federal Court has placed interim injunction orders on a Melbourne-based financial services firm after ASIC commenced proceedings against it for numerous alleged instances of misconduct.
The corporate regulator commenced proceedings against Financial Circle on 15 December 2017, alleging the business’ conduct was “misleading, deceptive and unconscionable”.
The company holds both an AFSL and an Australian Credit Licence, and is authorised to provide advice on life risk insurance and superannuation products as well as engage in credit activities other than as a provider, ASIC said in a statement.
“Financial Circle offers loans to consumers which ASIC alleges can only be obtained if the consumer agrees to obtain and implement financial advice,” the regulator said.
“The advice recommends purchasing personal insurance products and switching superannuation providers. When consumers implement the advice, significant advice fees are paid to Financial Circle from the consumer’s superannuation and in commissions from the insurers.”
The court found there was “appreciable risk” of future contraventions from the business, and made interim injunction orders that prevent Financial Circle from carrying on as a financial services business, providing product advice, or promoting or offering loans or cash payments.
These orders are in place “until the hearing and the determination of the matter”, ASIC said.
AMENDMENT: This article has been amended to remove the name of a previous employee of Financial Circle.
Open letter to Scott Morrison
EXCLUSIVE Now that he’s secured his leadership, Prime Minister Scott Morrison ...
FASEA open to accepting foreign qualifications
The Financial Adviser Standards and Ethics Authority has released its online for...
More advisers embracing advicetech: Report
A new report reveals that around 85 per cent of advice firms plan to invest mor...