Yellow Brick Road targeted by ASIC for licensing slip-ups
Monday, July 29, 2013/
Yellow Brick Road, the finance company run by property entrepreneur Mark Bouris, has been slammed by the corporate watchdog for providing advice through unregistered entities.
The Australian Securities and Investments Commission has taken the company to task for its licensing structure – but also acknowledged the company’s cooperation.
But the incident is also a lesson for other businesses offering credit. Under the credit licensing framework, all entities in contact with customers must be licensed.
The announcement is an acknowledgement of the complex legal structure involved with providing advice for credit. Most recently an ASIC review of the debt consolidation industry found members were providing advice without keeping proper records.
Yellow Brick Road was contacted by SmartCompany this morning, but declined to comment.
In a statement, ASIC said Yellow Brick Road has authorised over 100 employees to work as credit representatives. The company itself is organised through various branches and a complex structure.
The problem was that Yellow Brick Road needed to authorise the entities which operate these branches. The national credit licensing framework requires that anyone or any entity with contact to a consumer holds the relevant license.
“Yellow Brick Road is now in the process of authorising the corporate entities directly under its licence, and those entities can sub-authorise employees or they can be directly appointed under YBR’s credit licence,” ASIC said.
”It is important for all credit licensees to consider carefully how each party they deal with is authorised or licensed.”
As ASIC points out, the licensing regime is designed so that anyone engaging in credit services need to be authorised, as well as the entity itself providing advice or credit.
This isn’t the first time Yellow Brick Road has run into trouble with regulators.
Last year, the company suspended a mortgage broker over allegations he lied to a New South Wales corruption hearing.
“Yellow Brick Road’s contracted relationship with Andrew Kaidbay has been suspended pending the outcome of the current enquiry,” a spokesperson for the company told Property Observer last year.
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