ASIC has announced that it has fined timeshare lender Future Holiday Finance Pty Ltd (FHF) for responsible lending breaches. FHF has paid a penalty of $135,000 in response to three infringement notices and will pay up to $3 million in compensation to consumers. ASIC has accepted a court enforceable undertaking from FHF relating to a compliance and compensation program.
FHF only provides finance for the purchase of memberships in ULTIQA Lifestyle, a points-based timeshare scheme. FHF and the promoter have the same ultimate shareholders and a common director.
ASIC found that FHF signed consumers up to loans when they attended ULTIQA Lifestyle timeshare sales seminars, without first assessing if the loans were unsuitable for them.
The Promoter’s authorised representatives’ administrative assistants are also FHF’s credit representatives who helped customers sign credit applications and credit contracts at sales seminars.
After customers signed credit contracts FHF assessed the credit application.
If FHF approved the application it paid the loan amount to the Developer (which also had a common director).
As well as breaches relating to the timing of FHF’s loan assessments, ASIC had concerns about the quality of FHF’s loan assessment practices.
In addition, ASIC examined FHF’s loan document and identified a potentially unfair contract term. ASIC was concerned that the ‘entire agreement clause’ prevented verbal statements made by FHF from forming part of the contract. This clause is no longer included in the loan contract and FHF has agreed not to enforce this clause in any existing contract.
