Brokers could face jail for breaking new laws

“A conflict arises where an interest of the licensee conflicts with a legal obligation that the licensee owes to the client, including one that arises under the credit legislation,” ASIC said in a regulatory guide to the National Consumer Credit Protection Act.

Brokers who break those legal obligations face fines of up to $11,000 or two years in jail or both. If it is a company that is found guilty of breaching those obligations, the penalty can be as high as $1.1m.

CBA requires that brokers must submit at least four mortgage applications and settle a minimum of three loans within a six-month period while Westpac requires at least one loan to be settled every six months.

A complaint on the practice submitted to the ACCC by Refund Home Loans was dismissed last year and the FBAA has taken up the fight with Australian Broker reporting last month that the industry group is considering further action.