In a letter to the real estate institutes, ASIC warned that some real estate agents were advising tenants to apply for early release of their super in order to pay rent — something that could breach the Corporations Act.
“Financial advice must only be provided by qualified and licensed financial advisers, or financial counsellors, not by real estate agents who neither hold the requisite licence, nor are an authorised representative of an Australian financial services licensee,” ASIC wrote.
“The Corporations Act imposes significant penalties for a contravention of section 911A. For individuals, this can be a maximum of five years’ imprisonment, and/or a fine of up to $126,000 (600 penalty units); and for corporations, a fine of up to $1,260 million dollars (6,000 penalty units).”
ASIC wrote that tenants facing financial difficulty need “sound financial guidance and potentially debt counselling”, and warned that it would come down hard on any real estate agents it found breaching the act.
“We will be raising these concerns with the relevant state regulatory bodies and will be writing directly to firms where it is alleged or brought to our attention that they have breached the law,” ASIC wrote.
“ASIC intends to monitor this situation closely, and if contraventions of the licensing requirements of the Corporations Act are found, ASIC will not hesitate to act swiftly to protect vulnerable consumers.”
ASIC suggested that real estate agents instead direct tenants to their Moneysmart website if they felt they were in need of help with their financial affairs.
