Borrowers warned of dodgy home loans: ASIC
Borrowers are being warned to check the credentials of the business they seek home loans from, after ASIC discovered two mortgage providers opperating without a credit licence.
According to the corporate regulator, Ezy Savings and Caveat Loans ITstrong are not registered Australian businesses, yet these unlicensed companies continue to offer services for home loans and other types of credit.
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All lenders, brokers and credit intermediaries must be licensed by ASIC in order to offer consumer credit products and services.
While both companies no longer have operating websites, ASIC said both businesses continued to make unsolicited “cold calls” to potential borrowers after the new regulations officially came into play.
In these cold calls, consumers were subjected to high-pressure and often misleading or deceptive sales methods to persuade them to pay an advance fee towards obtaining a loan.
When consumers pay the fee the loan is not provided and consumers cannot contact the business.
All contact with consumers is made by phone, fax or email. The phone numbers appearing on the companies' websites and business documents have been traced to an end-user in India.
ASIC inquiries have established that money paid by consumers has been transferred overseas.
“Consumers seeking loans or other credit products should not deal with companies or persons who are not licensed by ASIC,” the corporate regulator said in a statement.