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ISCOVER
Staff Reporter
Former NSW president of the FBAA Christopher John Riotto has been found by ASIC to have engaged in “misleading and unconscionable conduct”.
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According to the watchdog, Mr Riotto and his company, Australian Lending Centre and Sydney Lending Centre, asked at least five clients to sign broking contracts for business loans when they knew the clients wanted personal loans.
According to court documents, the practical effect of this conduct was to remove important consumer protections provided by the Uniform Consumer Credit Code (UCCC).
In addition, the Federal Court found the brokers engaged in misleading or deceptive conduct by representing to lenders that the loans were for business purposes. The conduct took place between 2005 and 2008.
“This is a significant result for ASIC, which became the national regulator for consumer credit and finance broking in July 2010. ASIC’s action signals to brokers that attempts to circumvent the legal protections available to consumers will not be tolerated,” ASIC commissioner Peter Kell said.
“The outcome sends a clear message that ASIC will act against finance brokers and lenders who unconscionably place borrowers in inappropriate and unserviceable loans.”
The court granted an injunction restraining future similar conduct and awarded compensation to one of the borrowers who had suffered significant loss. The defendants must also pay ASIC’s costs.
