ASIC has commenced proceedings in the Federal Court against credit assistance provider Lightspeed Finance Pty Ltd (Lightspeed) and its director Mark James Fitzpatrick for failing to comply with Australian Financial Complaints Authority (AFCA) determinations.
On 4 December 2018, AFCA made its first determination regarding a Lightspeed client complaint. The determination required Lightspeed to pay a loan debt (including interest) owed by the client to a lender, prior to the client repaying Lightspeed the initial loan amount. On 12 July 2019, AFCA made a second determination in favour of the client, further reducing the client’s liability. Both determinations were accepted by the client and were binding on Lightspeed under the AFCA rules.
ASIC alleges Lightspeed failed to give effect to both AFCA determinations and that Mr Fitzpatrick was knowingly involved in these breaches.
Since 13 March 2019, reforms introduced as a result of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Royal Commission mean that a failure to co-operate with AFCA is a civil penalty offence with penalties of $10,500,000 for a company and $1,050,000 for an individual.
ASIC considers that compliance with external dispute resolution decisions is a critical part of a licensee’s general obligations and ensures that consumers have access to efficient independent dispute resolution.