ASIC has obtained orders in the Federal Court of Australia against Canberra-based mortgage broker, Tonadale Pty Ltd (trading as
ACT Mortgages) following allegations of unconscionable, misleading and
deceptive conduct in relation to the arrangement of low-documentation
(low-doc) loans.

ASIC commenced proceedings after investigating the conduct of Tonadale and Mr Kelvin Skeers, an employee of Tonadale, in
arranging two low-doc loans for the same client in August 2004 and
November 2005. At the time, the client was 20 years old, unemployed and
of no fixed address.

ASIC alleges that Tonadale and Mr Skeers acted in breach of the ASIC Act by:

• arranging two low-doc loans that the borrower could not afford to repay;
• misrepresenting the borrower’s financial position to the lender in the application forms; and
• misrepresenting to the borrower what would be included in the borrower’s loan application forms.

ASIC obtained orders in the proceedings against Tonadale, to which Tonadale consented, including:

• declarations that Tonadale engaged in misleading
  and deceptive conduct or conduct that was likely to mislead or deceive,
  and unconscionable conduct when the loans were arranged;
• an order that Tonadale pay $31,831.10 in compensation to the borrower;
• orders that require Tonadale to establish compliance, education and training programs and review its internal operations; and
• an order that Tonadale pay ASIC’s costs.

The matter in relation to Mr Skeers is still before the Court.