ASIC lawsuit a warning shot to car dealerships
A Sydney auto dealership which allegedly offered unlicensed car loans with excessive interest rates is in court as the financial watchdog says it has its eye on the industry.
Lansvale Motor Group, operated by Diamond Wheels, and Keo Automotive operated an automotive dealership in Cabramatta in Sydney’s southwest.
The Australian Securities and Investments Commission launched legal proceedings against the companies and former director Ken Keomanivong in the Federal Court on Monday.
The firms did not hold licences allowing them to issue loans, the watchdog alleges.
Customers were allegedly charged excessive interest rates, sometimes more than double that which could be lawfully charged.
Mr Keomanivong played a central role in administering the loans, ASIC alleges.
“ASIC is concerned that consumers with these loans were significantly overcharged and that their contracts missed key information,” said ASIC deputy chair Sarah Court.
Ensuring consumers were protected by credit legislation was a priority for the financial watchdog, she added.
“This is the first civil proceeding we have taken to address lending practices by car dealerships,” Ms Court said.
“Car dealers offering finance should be on notice that ASIC is looking closely at how they are operating.”
In the lawsuit, ASIC is seeking penalties and injunctions including orders against Mr Keomanivong preventing him from being involved in credit activities.
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