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With ASIC refusing to take responsibility, and Victoria's Consumer Affairs department claiming it has done its part, it is up to individual brokers to stop industry scammers, the MFAA said.
After last week’s revelation that infamous scammer Mark Whittingham has been linked to a new scam, which successfully defrauded an unknown number of brokers, The Adviser confronted both ASIC (the Australian Securities and Investments Commission) and Consumer Affairs Victoria with concerns from brokers that not enough had been done.
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However, ASIC was quick to palm off responsibility to Consumer Affairs and the police.
“Essentially 'businesses' fall within the relevant consumer affairs jurisdiction unless they are a company as defined by the Corporations Act. If it's neither (company/business registered with ASIC but looked after by Consumer Affairs), it may land with the relevant state police authorities as a matter of fraud,” a spokesperson said.
Mortgage & Finance Associtation of Australia CEO Phil Naylor told The Adviser that despite the industry body's efforts, not much has been done by the authorities.
“We’ve raised it with ASIC before, and Consumer Affairs has taken action against him in the past, but it obviously hasn’t worked,” Mr Naylor said.
“I’m not sure what else can be done if the regulators can’t do anything about him. What we’ve tried to do is alert our members about the dangers of dealing with any operator that is preying on honest brokers.
“If every broker was aware of these con artists, then everyone will be more careful and we’d essentially cut off their revenue stream.
“We are disappointed that there seems to be no way of stopping him, but I’m equally concerned that people aren’t being careful about whom they’re dealing with.”
ASIC said the regulator keeps a register of 'Companies you should not deal with'; however, none of Mr Whittingham’s previous companies are listed, including Connection Blue, which was revealed to be a scam seven months ago.
“Consumer Affairs Victoria issued a public warning about the conduct of Mr Whittingham in 2012, and obtained interim injunctions restricting Mr Whittingham's conduct in March 2013, with final orders obtained in June 2013,” a spokesperson said.
“When scam operators are identified, our regulatory responses are proportionate and integrated, and our prime concern is to minimise consumer detriment.
“This is achieved by empowering consumers with information so as to protect their own interests.”
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