A former NSW car loan broker has been banned from engaging in credit activities for 10 years and his credit licence has been cancelled after he allegedly provided false documents to a car dealer.
An investigation by the Australian Securities and Investment Commission found Fernando Morais, of Carlingford, NSW, had breached credit legislation by recklessly providing false documents in five applications for consumer credit to BMW Australia Finance, which trades as Alphera Financial Services.
According to the regulator, Morais did not believe he was responsible for checking the accuracy of documents he forwarded to the finance company between August 2011 and November 2011.
The corporate watchdog also alleges he created false documents for two business-purpose cars.
ASIC deputy chair Peter Kell said in a statement the action is intended to send a strong message to any broker behaving dishonestly or recklessly.
“When we find individuals engaging in such misconduct, ASIC will not hesitate to remove them from the industry,” he says.
Professor of commercial law at Melbourne University, Ian Ramsay, told SmartCompany this morning he agreed ASIC’s ban is sending a strong message to others in the industry.
“Firstly a banning order for 10 years is high and undoubtedly indicates the severity with which ASIC views the conduct here,” he says.
“I think it would be true to say a 10-year banning order, which will impact someone’s livelihood, and ban from industry, it does send a strong message.
“Not as strong gas criminal prosecution but… a strong deterrent message to the industry.”
He says since becoming the regulator of consumer credit in 2010, ASIC has achieved significant loan fraud outcomes with 11 criminal proceedings and 45 individuals or companies being banned from providing credit services.
“I think what this tells us is there is a degree of misconduct (in the industry) because… ASIC only has resources to investigate some of the complaints and can only prosecute or enforce the law in relation to some of the complaints that it gets,” he says.
Ramsay says the regulator’s limited resources meant deterrents in the form of bans could be quite important.
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“With the budget cuts that ASIC is currently suffering, it makes it more challenging for ASIC to provide comprehensive enforcement (on these matters)… maybe then sending a strong message through matters like this even more important,” he says.
“I think it’s a helpful reminder to industry about ASIC’s powers and what it can do.”
SmartCompany contacted Morias and Alphera Financial Services for comment but did not receive a response prior to publication.