Determination - 29 June 2015
Summary of Determination
1. I find that the FSP acted unlawfully by providing a loan to the consumers in circumstances where the FSP:
(a) was in the business of providing credit (in the form of loans secured by mortgages over real property), however
(b) did not hold an Australian credit licence which authorised it to engage in that credit activity.
2. Consequently, I find that the consumers are entitled, as a matter of law, to a remedy which sees the FSP prevented from profiting from the loan. However, I also find that the consumers are required to account for the benefit they obtained from the loan.
3. To resolve this complaint, I order that the loan between the FSP and the consumers be varied as follows:
(a) the consumers’ liability to repay money to the FSP is limited to the principal amount advanced under the loan,
(b) all payments made by the consumers to the FSP to date are to be applied towards the reduction of the principal amount, and
(c) the consumers are to repay the balance owing on the loan after this adjustment on a periodic basis at an amount commensurate with their financial means, until the loan is repaid in full.
4. I also order that the FSP remove any listing recorded on the consumers’ credit reports in relation to the loan; or, if the FSP has not yet recorded any listings on the consumers’ credit reports in relation to the loan, that it not do so in future.
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