AAT increases banning period for architect of ‘Diamond Model’ payday lending sham

The Administrative Appeals Tribunal (AAT) has confirmed that Mr Robert Legat, a solicitor on the Gold Coast, should be banned from engaging in credit activities. ASIC originally banned Mr Legat for a period of three years and Mr Legat appealed the ban. On 9 April 2019, the AAT ruled the banning period should be extended to five years.

The AAT decided to increase the banning period after the Deputy President hearing the appeal considered Mr Legat’s demonstrated lack of contrition and absence of any insight into his behaviour.

The AAT’s decision stated: ‘Mr Legat’s incompetence and irresponsibility, the misleading or deceptive conduct, and the deliberateness of the conduct – together with the absence of contrition or insight which suggests he remains a risk – suggest a banning period closer to the middle of that range is appropriate’, referring to the factors and examples of conduct relating to specific periods of banning outlined in Table 2 toRegulatory Guide 218 – Licensing: administrative action against persons involved in credit activities.

Mr Legat operated several consumer credit companies, known as Fast Access Finance. Consumers who were seeking small value loans (of amounts generally ranging from $500 to $2,000) entered into contracts that purported to be for the purchase and sale of diamonds in order to obtain a loan (Diamond Model). Consumers were completely unaware of the actual nature of the contracts into which they were entering and assumed that they were obtaining a traditional loan (15-278MR).

The AAT referred to ASIC’s civil penalty proceeding against the payday lending companies operated by Mr Legat, stating: ‘He [Mr Legat] proposed and oversaw the implementation of a sham business model that should never have seen the light of day, and which the Federal Court said ‘border[ed] on the ridiculous’: Fast Access Finance (No 2) at [17]. That model resulted in real detriment to consumers who paid higher premiums on what were, in substance, loans, than was permitted by law. The applicant was motivated – indeed he appeared to be blinded – by a desire to avoid the operation of a law that the FAF group found inconvenient.’

‘ASIC welcomes the AAT’s decision which supports the decision of our own delegate. In this case, Mr Legat deliberately sought to avoid the protections offered to consumers in the National Credit Act. He is not a fit and proper person to be providing credit,’ said ASIC Commissioner Sean Hughes.

Read and download the AAT judgment here.


On 28 September 2017, ASIC banned Mr Robert Legat from engaging in credit activities for a period of three years for his involvement in the Diamond Model operated by Fast Access Finance Pty Ltd, Fast Access Finance (Beenleigh) Pty Ltd and Fast Access Finance (Burleigh Heads) Pty Ltd (the FAF Companies) (17-336MR).

In 2015, the Federal Court found that the Diamond Model ‘comprised a pretence or sham, brought into existence as a mere piece of machinery, to conceal the true nature of the transaction, which was the provision of credit’. The companies implemented the Diamond Model as a method to circumvent the 48% legislative interest rate cap (15-278MR and 17-060MR).

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