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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 Investment 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 that applied to most consumers who entered a credit contract with Jacaranda. Furthermore, the regulator found that the calculator was advertising 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 commenced its investigation.
The fintech lender paid $26,640 in compliance with the infringement notices on 8 February 2023, however, ASIC noted that payment of the infringement notice “is not an admission of guilt or liability”.
ASIC deputy chair Sarah Court said the regulator was concerned that consumers were relying on the website’s estimated generated repayments in regard to making a decision on whether or not to apply for a loan or if the loan was appropriate for them.
“This information was misleading and could have led consumers to apply for a loan that was more costly than they had expected,” Ms Court concluded.
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“ASIC will continue to promote the confident and informed participation of consumers in the financial system, by requiring lenders to ensure that the information on their websites accurately reflects the credit product being offered.”
Broker sentenced over 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” contrary to s253(b)(ii) of the Crimes Act 1900 (NSW).
ASIC confirmed that Mr King had pleaded guilty to loan fraud following charges over falsified loan and payslip information for mortgages.
The Sydney broker handed a guilty plea on 16 December 2022 to a total of six “rolled-up charges”.
ASIC highlighted that it was alleged that between 2 July 2013 and 12 May 2016, Mr King created 74 false documents in support of 29 loan applications that included 57 false payslips, nine false PAYG payment summaries, and eight false real estate documents.
The allegation was that Mr King used these false documents to “support loan applications for clients of the credit brokerage businesses he part-owned and operated”.
[RELATED: Home loan broker handed 14-month sentence]
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