Gold Coast man Robert Legat banned from providing credit for three years for diamond loan scam

THE man behind a Gold Coast sham which used diamonds to get around capped interest rates on payday loans has been banned from providing credit services for three years.

Fast Access Finance charged customers up to 1000 per cent interest with a diamond loan scam.

THE man behind a Gold Coast scam which used diamonds to get around capped interest rates on payday loans has been banned from providing credit services for three years.

The Australian Securities and Investments Commission said it had banned Robert Legat after the Federal Court found the Fast Access Finance stores at Burleigh Heads and Beenleigh illegally engaged in credit activities without a licence.

The companies were fined $730,000 for using the purported sale and purchase of diamonds to provide loans, a model the court found was designed to conceal the true nature of the transaction, which was the provision of credit.

Consumers who were seeking loans from $500 to $2000 entered into contracts they assumed traditional loans.

As a result they were charged interest as high as 1000 per cent instead of the legal 48 per cent or lower.

ASIC found that Legat created and caused the Fast Access Finance companies to implement the diamond model, which got around the compulsory 48 per cent interest rate cap that should have applied to the loans.

“This conduct demonstrated a lack of judgment, integrity and professionalism on Legat’s part and a disregard for the law,” a statement from ASIC said, adding that Legat was not a fit and proper person to engage in credit activities.

ASIC Deputy Chair Peter Kell said the laws were designed to protect consumers.

“ASIC will take action against people who seek to deprive consumers of these protections,” he said.

Legat has told The Gold Coast Bulletin that Fast Access Finance voluntarily ceased using the model in 2012. He has filed an appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.