The Australia Securities and Investments Commission (ASIC) has resumed proceedings in the Federal Court of Australia against two companies engaged in finance broking.

ASIC alleges that Australian Lending Centre Pty Ltd and Sydney Lending Centre Pty Ltd contravened the Australian Securities and Investments Commission Act (ASIC Act) by falsely representing that various loan contracts were wholly or predominantly for business or investment purposes rather than for personal, household or domestic use.

Consumers with loans for personal, household or domestic purposes are protected by the Uniform Consumer Credit Code (UCCC), however, loans that are wholly or predominantly for business or investment purposes fall outside this legislation.

ASIC alleges that Australian Lending Centre Pty Ltd and Sydney Lending Centre Pty Ltd engaged in unconscionable conduct in broking and entering various finance broking contracts between 2005 and 2008.

Further, ASIC has also commenced proceedings against lending company,

AMR Investments Pty Ltd, alleging they have engaged in unconscionable conduct by entering into a loan contract.

ASIC alleges that the sole director of the three companies, Mr Christopher John Riotto of Haberfield, New South Wales, aided and abetted contraventions by Sydney Lending Centre Pty Ltd and AMR Investments Pty Ltd in relation to one particular loan transaction.

ASIC is seeking declarations that Australian Lending Centre Pty Ltd, Sydney Lending Centre Pty Ltd, AMR Investments Pty Ltd and Mr Christopher John Riotto contravened the ASIC Act and orders restraining Australian Lending Centre Pty Ltd and Sydney Lending Centre Pty Ltd from making representations that a person has sought a loan for business or investment purposes when that person has sought a loan for a purpose which is personal, household or domestic.

ASIC is also seeking the payment of compensation to two impacted borrowers.

The matter is listed before the Federal Court in Sydney on 18 June 2010.

ASIC is taking these actions under the consumer protection provisions of the ASIC Act, which prohibit misleading, deceptive and unconscionable conduct in relation to financial services.