Extra licence condition imposed on Award Mortgage Solutions by ASIC

An additional licence condition has been imposed on mortgage broker Australian Property Funding Group Pty Ltd, who trade as Award Mortgage Solutions and are Sydney-based, following an investigation by ASIC.

Concerned that they were not complying with their obligations as an Australian credit licensee, ASIC listed their particular concerns as the following:

- It did not properly assess and verify loan applications, leading to the potential for false documents being submitted to credit providers

- Disclosure documents were not always given to clients and when they were, often they could not be understood by borrowers for whom English is a second language, and

- It did not properly appoint, supervise and train its staff and credit representatives, particularly those based in a processing office in China.

The new condition requires the broker to have an independent consultant to review its compliance obligations under the NCCP Act 2009.

Responsible lending, general conduct, and the appointment, supervision and training of its Australian and overseas representatives, are all up for review.

ASIC deputy chairman Peter Kell said the results will be reported to ASIC and the broker will then implement any recommendations. These recommendations will be made over the next year and a half.

"All licensees must ensure that outsourcing arrangements do not diminish the licensee's ability to fulfil their obligations to customers, or to comply with financial services laws," said Kell.

"Outsourcing functions to overseas representatives can make it harder for licensees to ensure that these standards are met, and licensees should pay special attention to identifying and managing those risks when considering such a strategy."

Jennifer Duke

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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