We’re all faced with a dilemma when it comes to our finances. We want to make sure we’ve done our research and sometimes a bit of advice from someone who’s been there, done that can go a long way. Trawling through broker websites can be overwhelming so it’s a good idea to speak to an expert before signing the dotted line.

Online, we can see through the marketing campaigns and are confident that we won’t fall for it. We are on high alert for scams – we’ve read hundreds of articles on the topic – but you can’t be too careful, especially when it comes to your money.

Even with Google at our fingertips we can fall victim to the smooth talkers around us – does the name Frank Abagnale ring a bell?

On a less glamourous scale, brokers periodically pop up in the news for dodgy practices and we repeatedly see people falling victim to licensed and unlicensed financial advisors.

 

Recently, Natalie visited us asking for advice on how to get her deposit back. Her sister – Kim – had referred us to her. Kim had recently refinanced her mortgage with us and after hearing that her sister may lose a $38,000 deposit, she called us and immediately booked an appointment for Natalie.

Natalie had started dealing with a property promoter who was giving her misleading information on purchasing an investment property through a Self-Managed Super Fund (SMSF). Natalie did not have a SMSF and was assured that the promoter would be able to set it up for her by the settlement date. She had her heart set on a property close to her sister’s home, and rushed into an agreement signing a blank application form.

After a series of frustrating email exchanges, Natalie found that the company representative was delaying processing her application for her loan. Furthermore, they misled her with incorrect information. She became overwhelmed with the process and feared she lost her deposit.

During her appointment, we did a quick search on the company and found that they had been unlawfully carrying on as a financial services business for over 5 years. We advised her to cite this information to the company representative, rescind her application and demand her deposit back.

Based on Natalie’s experience, we highly recommend that you take the following steps to protect yourself:

 

  • Check that your broker has the appropriate Australian Credit Licence (ACL)
  • Do a quick search on ASIC to see if there are any notices or warnings for new clients
  • Never sign a blank application form
  • Always review any information processed in your application form
  • Ask about hidden fees and charges
  • Never make financial decisions under pressure as you can be blindsided by a stressful situation and leave yourself vulnerable to bad practice

 

Avoid the stress and heartache of a legal battle by doing a little more homework at the start. You won’t regret it.

 

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