Following
ASIC action, a financial services and credit business that provides advice about life-risk insurance and superannuation products has been restrained from providing financial advice or entering into credit contracts.
Melbourne-based Financial Circle was issued the interim injunctive orders by the Federal Court of Australia after ASIC accused the firm of misleading, deceptive, and unconscionable conduct.
According to ASIC, Financial Circle provided loans only to those consumers who agreed to receive and implement financial advice to buy personal insurance products or switch superannuation providers. The firm then allegedly receives significant advice fees from the consumer’s superannuation and in commissions from the insurers.
The regulator sought injunctive relief, declarations of contraventions, and financial penalties against Financial Circle for alleged breaches of the
Corporations Act 2001, the National Consumer Credit Protection Act 2009, and the
Australian Securities and Investments Commission Act 2001, including breaches of the best interests duty and unlicensed conduct.
The order remains in effect until the hearing and determination of the matter.
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