Accepting payment without intending or being able to supply as ordered

Offence title:

Accepting payment without intending or being able to supply as ordered

Act:

12DI Australian Securities and Investments Commission Act

Offence:

(1)   A person contravenes this subsection if:

(a)   the person, in trade or commerce, accepts payment or other consideration for financial services; and

(b)   at the time of acceptance, the person intends:

                                           i.         not to supply the financial services; or

                                         ii.         to supply financial services materially different from the financial services in respect of which the payment or other consideration is accepted.

(3)   A person contravenes this subsection if:

(a)   the person, in trade or commerce, accepts payment or other consideration for financial services; and

(b)   at the time of acceptance, there are reasonable grounds for believing that the person will not be able to supply the financial services within the period specified by the person or, if no period is specified, within a reasonable time.

Penalty:

2,000 penalty units

Summary/Indictable/mixed:

Summary

Jurisdiction:

Local Court

How committed:

(1)   A salesperson sells a consumer an endowment insurance policy knowing to be a trauma policy.

(3)   A insurance broker is about to close their business but makes one last sale before the insurance company terminates the licence; they miss the cut off and the policy never materialises.

Important note:

Limitation period: 3 years