The Federal Court has handed down financial penalties totalling $150,000 after two firms failed to co-operate with the Australian Financial Complaints Authority (AFCA). 

The Australian Securities and Investments Commission (ASIC), which took the court action, says the companies repeatedly refused to provide documents and information to AFCA when requested and subjected staff to inappropriate and unprofessional behaviour. 

Home finance companies General Commercial Group, formerly known as Urban Commercial Group, and Eden Capital, formerly known as Southside Lending, were each penalised $50,000.  

General Commercial Director Dale Brendan Heremaia and his son Eden Capital Director Benjamin Eden Heremaia were ordered to pay $30,000 and $20,000 respectively for their roles in the misconduct. 

“Despite being members of AFCA, actions were taken to break the law by threatening to sue complainants, as well as taking legal proceedings against complainants and against an AFCA staff member personally,” ASIC Commissioner Danielle Press said. 

“As directors, Dale and Benjamin Heremaia had a responsibility to make sure their companies complied with AFCA’s processes, but instead, they went out of their way to avoid doing so.”  

General Commercial also failed to pay more than $11,000 to complainants under an AFCA determination. 

Justice Kylie Downes said the conduct continued over a lengthy period of time, was not inadvertent and undermined the effective operation of AFCA’s processes and the resolution of the complaints by the consumers. There was no suggestion of dishonesty. 

“Cooperation by AFCA members with AFCA is important to the effective running of the AFCA scheme,” she said. “For this reason, it is necessary that the penalties be sufficient to deter other members of AFCA from engaging in similar conduct.” 

AFCA Chief Ombudsman David Locke welcomed the court’s ruling and its recognition of the need for firms to cooperate. 

“The vast majority of the members of our external dispute resolution scheme do work in partnership with us, and this is to the benefit of firms as well as consumers,” he said. 

The decision is available here.