The Australian Securities and Investments Commission (ASIC) has started Federal Court action against Melbourne-based Financial Circle over its advice and tactics.

ASIC alleges the company offered loans that could be obtained only if consumers agreed to financial advice, which included buying insurance and switching superannuation providers.

“When consumers implement the advice, significant advice fees are paid to Financial Circle from the consumer’s superannuation and in commissions from the insurers,” the regulator said. “ASIC alleges Financial Circle’s conduct is misleading, deceptive and unconscionable.”

On January 10 the Federal Court made interim orders that included stopping Financial Circle from carrying on a financial services business, providing financial advice or entering into credit contracts. The orders apply until the case is decided.