The director of Consumer Affairs Victoria has accepted an enforceable undertaking from a property investment company that made false claims related to investing in a superannuation fund.
Earlier this month, Consumer Affairs announced that it had accepted an enforceable undertaking from Melbourne-based Accrue Property.
Consumer Affairs found that Accrue made several false or misleading statements on its website.
One of these claims was that the company could show investors how to use their super funds to “earn an outstanding return, regardless of market conditions or whether capital growth occurs”.
It also claimed the Accrue Landbanking system could turn an investor’s super fund into a “goldmine – to purchase an appreciating asset, without taking a cent out of your own pocket”.
Accrue must now advise current or prospective customers that “no return is ever guaranteed” in relation to investing in property and investing through an
The company has also agreed to remove all false or misleading claims from its website and to submit to a two-year compliance program to ensure all company statements comply with Australian Consumer Law.
Accrue has also agreed to pay $5,000 to the Victorian Consumer Law Fund.
Comment: $5,000 ? They would have made more than that one single property deal. If it has been a financial planning firm they would have been hung out to dry
The ATO’s new penalty powers will potentially rake in millions of dollars from the SMSF sector, according to Townsends Business & Corporate Lawyers.
In a statement released last week, Townsends said an expected minimum of $150 million in fines will be collected from the SMSF sector following the new penalty powers coming into effect on July 1 this year.
“It would seem that the SMSF sector is certainly doing its bit for the new government’s fiscal responsibility measures,” Towsends said.
The proposed ATO fines range from $850 for “simple” breaches to upwards of $10,000 for breaches such as providing financial assistance to members and their relatives.
Townsends added that it is critical that trustees ensure they are aware of their responsibilities and rectify any breaches immediately to avoid penalty notices.
“Trustees should start considering now whether there are any current breaches that need to be addressed in the lead-up to end of financial year to avoid a nasty fine being imposed,” Townsends stated.
In a recent decision by the Federal Magistrates Court, a Human Resources Manager of a company was ordered to pay a penalty for being knowingly involved in breaches of workplace laws by his employer.
In the case of Fair Work Ombudsman v Centennial Financial Services Pty Ltd & Ors a company was found to have breached various sections of the then Workplace Relations Act 1996 (repealed and eventually replaced by the Fair Work Act 2009). The breaches included setting up sham arrangements and not paying statutory entitlements to employees.
The court proceedings named the sole director of the company as a defendant along with the Human Resources Manager who was not a director of the company.
The HR Manager submitted to the Court that he:“had merely been following the instructions of [the director] and had not had any input into the decisions which gave rise to the contraventions.” He submitted that his position as the human resources manager was “a mere title” and that he had no authority beyond what was approved by the director
.”However, in considering all the facts, the Court held that the HR Manager had knowledge of the essential facts of the breaches by the company and was knowingly concerned in and participated in the breaches.”
In the second judgment, the Court noted that the events:
“had a chilling effect on his career in human resources and that he has seen a significant decline in his income which would tend to increase the impact on him of any financial penalties imposed in these proceedings.…..The total penalty is $3,750. I am satisfied that these are just and appropriate amounts as aggregate figures.”
This decision by the Court is a reminder that Managers not just Directors of companies should ensure that the work they undertake complies with the relevant legislative requirements and they do not merely “follow instructions from the Company Directors”.