For the second time this year ASIC has shown that it will back up the Australian Financial Complaints Authority by taking companies to court when they fail to comply with the ombudsman’s determinations.
ASIC has commenced proceedings in the Federal Court against General Commercial Group, formerly known as Urban Commercial Group, and Eden Capital, formerly known as Southside Lending, for failing to take reasonable steps to co-operate with AFCA.
It is also seeking penalties against Dale Heremaia and Benjamin Heremaia, the owners and operators of the two companies.
ASIC alleges that the companies were disruptive, aggressive and unco-operative in their dealings with AFCA, with the intent of disrupting the complaints handling process.
It alleges that, among other things, the company failed to pay a determination; threatened AFCA complainants with legal proceedings unless they withdrew their complaints; threatened to bring proceedings against AFCA staff who were investigating complaints; and failed to provide AFCA with the documents and information requested.
In April, ASIC started Federal Court proceedings against Lightspeed Finance and its director Mark Fitzpatrick for failing to comply with AFCA determinations.
Failure to co-operate with AFCA has been a civil penalty since April 2019, with penalties of up to A$10.5 million for companies and $1 million for individuals.
ASIC said in a statement that compliance with AFCA determinations is part of a licensee’s obligations.