by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
MFAA Prosper : Mortgage and Finance Brief 09
Case TWO The complaint It was alleged that a broker member had failed to exercise due care, skill and diligence in his supervision of a representative of his broking business. Further to that, it was also alleged that the member was vicariously liable for the action of the representative. What had happened? A lender had advised that it had become aware of a fraudulent approval letter under the member's accreditation. The MFA A member denied any knowledge of the letter but indicated he had allowed a relative (who was not accredited with the lender and was not an MFA A member) to use his accreditation to submit a loan. He had assumed there would be no problems with the loan as it had already obtained conditional approval. The relative, however, denied sending the fraudulent approval letter. The Tribunal's decision The Tribunal, on the basis of evidence received, concluded that the letter had been sent by the relative and that the MFA A member was not involved in creating or sending the letter, nor was he aware of the letter having been sent. The Tribu nal decided that the allegation that the member be held vicariously liable for the actions of his relative was not made out but the allegation that he failed to exercise due care, skill and diligence in his super vision was made out. The Tribu nal censured the member without making a finding of misconduct. You’ve got your Credit Licence...... now what? Now that you have your Credit Licence, you can breathe a sigh of relief and put it all behind you. True or False? Well, not quite true anyway. With ASIC as your regulator, mortgage businesses will need to manage a number of issues going forward. This should not pose a problem if you have implemented systems to manage your compliance obligations. But from time to time, you might need some assistance in some or all of the following areas and Gold Seal can certainly help you! Timely information about changes to the regulatory requirements through our Update Service for Gold Seal’s Credit Compliance Management System; Subscription to the Compliance Helpline for access to guidance and support on compliance, legal and regulatory matters; External reviews of your loan writers’ activities; and Audits of your compliance management system to ensure that it is up to date and working properly. Tap into our expertise in assisting financial services intermediaries with licensing, regulatory, compliance and legal issues for over 8 years. Save time, save money, save hassle! call 02 8353 6600 or visit www.goldseal.com.au To arrange for us to support your Credit Licence.... COMPLIANCE LICENSING LEGAL an ACL licence or an authorisation from an ACL licensee, he could have aided and abetted the relative's breach of the law in arranging a mortgage without authorisation. Why would any broker take such risks? The commission that you earn is not worth it. The time, trouble and effort involved in defending such a claim takes you away from your business. The stress impacts adversely on the time you are able to spend. And once you have had a successful claim against you, the cost of your professional indemnity insurance will rise. Never assume, never presume. Always tell the client the exact terms of the approval you have granted. And don't let anyone 'piggy back' on your hard-earned accreditation and reputation, no matter how trustworthy they appear. * Claire Wivell Plater is the Managing Director of Gold Seal Risk Management Services, a provider of compliance, regulatory and legal advice to the mortgage, financial planning and insurance sectors. Claire is the author of the Mortgage Broker Manuals which provide a complete compliance management system under the NCCP laws. For more information, see www.goldseal.com.au. Legal - Tribunal
Mortgage and Finance Brief 08
Mortgage and Finance Brief 10