ASIC is intensifying its enforcement activity against unlicensed credit providers.
In Australian Securities and Investments Commission v ACN 092 879 733 Pty Ltd [2012] FCA 923 Judge Nicholas imposed a $7500 pecuniary penalty on the sole director of a company (formerly known as EasyChoice Home Loans Pty Ltd) which promoted on its website home and investment property loans since March 2011 when it did not hold an Australian credit licence.
Whilst an injunction was granted against EasyChoice, ASIC did not seek a pecuniary penalty against it.
The maximum penalty that may be imposed for a contravention of s 30(2) of the National Credit Act is $1,100,000 for a corporation or $220,000 for an individual: see s 30(2) and s 167(3) of the National Credit Act and s 4AA of the Crimes Act 1914 (Cth).
Judge Nicholas commented:
In the case of the second respondent, the applicant submitted that a pecuniary penalty in the range of $10,000 to $15,000 would be appropriate.
The principal object of the pecuniary penalty provisions in the National Credit Act is deterrence. …
In its submissions the applicant accepted that the website was taken down after the proceeding was commenced. The second respondent’s failure to arrange to have the website taken down (or to take other corrective action) sooner than it did was not explained. The evidence shows that the second respondent did not treat Ms Hunter Ward’s warning seriously and that his attitude to the regulator’s efforts to have his company comply with the law was unjustifiably non-responsive. That is a matter that I take into account in fixing an appropriate pecuniary penalty. But I also take into account that the evidence before me indicates (as the applicant concedes) that the first respondent did not actually engage in credit activity at any relevant time and that there is no reason to think that any person suffered any loss as a result of the respondents’ contraventions of s 30(2).
In all the circumstances I am satisfied that a pecuniary penalty of $7,500 should be imposed upon the second respondent. The respondents should also pay the applicant’s costs of this proceeding. “
