The Australian Competition and Consumer Commission has acted quickly to prevent the promotion of a home loan scheme which may breach the consumer protection provisions of the Trade Practices Act 1974.
In proceedings instituted earlier this month, the ACCC has alleged that Guardian Finance and Insurance Consultants Pty Ltd, promoted a scheme that could amount to an illegal pyramid selling scheme or referral selling scheme. The ACCC also alleged that its sole director, Mr Peter Martin James (also known as Peter St James) was knowingly concerned in the alleged conduct.
The ACCC has alleged that Guardian Finance and Insurance Consultants promoted a reducible home loan scheme where:
- consumers who take a loan through Guardian Finance and Insurance Consultants will receive a 0.1% reduction in their interest rate for each customer they successfully refer to Guardian Finance and Insurance Consultants
- consumers who take a reducible home loan from Guardian Finance and Insurance Consultants will receive various benefits from Guardian Finance and Insurance Consultants for each customer successfully referred thereafter
The ACCC has alleged that in carrying on this scheme, Guardian Finance and Insurance Consultants is likely to have breached or attempted to breach the pyramid selling and referral selling provisions of the Act.
The ACCC has obtained interlocutory injunctions against Guardian Finance and Insurance Consultants and Mr James. The injunctions were imposed by Justice Spender in the Federal Court, Brisbane and operate until the trial of the matter or earlier order.
The injunctions prevent Guardian Finance and Insurance Consultants from contravening the pyramid selling provisions of the Act by promoting the scheme in its current form.
"Home mortgages are one of the largest financial transactions a consumer can enter into", ACCC Chairman, Professor Allan Fels, said today. "With this in mind it was important that the ACCC act quickly at a time where it is believed the scheme is at an early stage. The use of the Internet to promote the alleged scheme also warranted the ACCC acting quickly as the scheme had the potential to affect a large number of people in a short period of time".
At the final hearing the ACCC is seeking declarations that Guardian Finance and Insurance Consultants and Mr James breached the Act, injunctions to prevent future conduct by Guardian Finance and Insurance Consultants and Mr James, refunds for affected consumers, the implementation of a trade practices compliance program, and costs.
The Court will make directions for the progress of the matter.