Fintech lender hit with 2 breach notices: ASIC
Jacaranda was issued the notices by ASIC after it was alleged that the lender’s website may contain false or misleading information.
The Australian Securities and Investments Commission (ASIC) issued the two infringement notices against fintech lender Jacaranda following concerns that a repayment estimate calculator on Jacaranda’s website may have misled consumers.
ASIC found that the annual percentage rate used in the calculator was “significantly less” than the rate applicable to most consumers entering into a credit contract with Jacaranda. Furthermore, the inspectorate found that the calculator advertised loans at an annual percentage rate that the fintech lender did not offer.
Jacaranda has since removed the calculator from its website in September 2022 after ASIC launched its investigation.
The fintech lender paid $26,640 in compliance with the breach notices on 8 February 2023, but ASIC noted that payment of the breach notice “is not an admission of guilt or liability”.
ASIC deputy head Sarah Court said the regulator was concerned that consumers were relying on the website’s estimated generated repayments when making a decision about whether to apply for a loan or whether the loan was suitable for them.
“This information was misleading and could have led consumers to apply for a loan that was more expensive than they expected“, Ms Court concluded.
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“ASIC will continue to promote safe and informed consumer participation in the financial system by requiring lenders to ensure that the information on their websites accurately reflects the credit product on offer.”
Broker sentenced for false documentation
Sydney-based broker Trevor William King was sentenced to a 14-month Intensive Corrections Order (ICO) after he was found guilty of making false documents to “obtain a financial advantage” in breach of s253(b)(ii) of Offenses Act 1900 (NSW).
ASIC confirmed that King had pleaded guilty to loan fraud following charges of falsifying mortgage loan and pay slip information.
The Sydney broker pleaded guilty on 16 December 2022 to a total of six “combined charges”.
ASIC highlighted that between 2 July 2013 and 12 May 2016, King was alleged to have created 74 false documents to support 29 loan applications which included 57 false payslips, nine false PAYG payment summaries and eight false property documents.
The allegation was that King used these false documents to “support loan applications for clients of the credit brokerage businesses he co-owned and operated”.
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