The Australian Securities and Investments Commission is looking into consumer advocacy group Choice and a company co-founded by Kevin Rudd’s former press secretary over credit licence requirements and consumer protection laws.
Lachlan Harris, who previously worked as press secretary for Kevin Rudd, would not confirm with SmartCompany this morning whether an investigation is taking place into his company One Big Switch, but said he is comfortable with the company’s legal position.
“We are very comfortable with our legal position. There’s been a lot of speculation within the industry, but we are comfortable with our legal position and we have a good team of legal advisors.”
An ASIC spokesperson also told SmartCompany this morning there would be no comment on the matter.
However, Choice spokesman Christopher Zinn said there is no formal investigation, and that this “is just a regular discussion”.
“We have been asked to provide some information, and we’ve spoken with ASIC prior to all of this. This is a new venture, and we’ve been proactive in keeping them informed.”
“We’re confident that we have played the appropriate role in the big bank switch. We are confident of staying in line with rules and laws.”
The AFR has reported that One Big Switch, a business designed to sign up thousands of mortgage holders in order to leverage banks to get better deals, is being investigated. One Big Switch is working together with Choice.
The businesses hope to be funded through commissions after signatories receive a new mortgage product.
ASIC has reportedly made investigations into whether Choice needs to obtain a credit license, and whether One Big Switch is complying with credit laws.
It is understood that the Mortgage and Finance Association complained that One Big Switch is not conducting profiles on the thousands of mortgage holders it has already signed up – a requirement under the new laws to determine if a mortgage product is suitable for them.
Australian Bankers Association chief executive Steven Munchenberg has told the publication that Choice should review whether it should call itself a consumer advocacy group.
“They are saying commissions are bad when banks charge them but it’s okay for them to recommend people use a service funded by commissions,” he said.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
