Is it any wonder why senior regulators and government ministers label car dealers as shonks when a Cairns second hand car dealer is fined $1.2 million for being in breach of consumer credit laws?
Colin William Hubert who operates SCS was charging clients up to $990 to facilitate loans at 48 per cent interest for unreliable second hand cars through his own cash brokers company, Channic Pty Ltd.
It all came to a head when the Indigenous Consumer and Assistance Network (ICAN) brought the matter to the attention of ASIC.
Legal action was taken by a group of indigenous people who had taken out loans between July 2010 and June 2012. Most were from the relatively isolated community of Yarrabah east of Cairns.
In a court case prosecuted by ASIC, witnesses said they each lost up to $13,000.
AADA CEO David Blackhall said this appalling behaviour by SCS creates an unfortunate backlash on new car franchised dealers.
“I have been pounding the pavement around Canberra over the past few months telling ministers and regulators that AADA members are governed by a strict level of ethics by the manufacturers as part of their franchise agreement and that no way should or could they ever be lumped into the same category as shonky backyarders.
“Unfortunately operators like SCS give all car dealers a bad name through their unscrupulous business practices.
“I want to see these people who have no morals run out of business and I won’t rest until they are“, he said.
Prunella Jones, a mother of seven, went to SCS in 2010 in search of a bigger car for her family only to find it plagued with problems.
In recordings obtained by NITV News (National Indigenous Television) she said the car being offered wasn’t even driveable and had to have a number of things fixed.
Hubert was ordered to pay $776,000 in fines, $42,000 in damages and $47,699 in compensation to victims for breaching consumer credit law.
Kaan Finney, a senior manager in ASIC’s financial services enforcement team said the penalty should serve as a warning to those who prey on indigenous communities.
He told NITV News that often, indigenous consumers are unaware of the protection the law offers them and they fall victim to unscrupulous people who take advantage of their naiveté.
He said the actions of the respondents caused some of the most vulnerable consumers in Australian society serious financial harm and other businesses should take note not to contravene consumer protection laws to maximise their own profits.