The Australian Securities and Investments Commission (ASIC) has cancelled the Australian financial services (AFS) licence and Australian credit licence of Ultiqa Lifestyle Promotions Limited (in liquidation) following payment of compensation by the Compensation Scheme of Last Resort (CSLR).
On 28 June 2024, the Australian Financial Complaints Authority (AFCA) made a determination against Ultiqa, which Ultiqa failed to pay. Subsequently, on 2 October 2024, the CSLR paid $19,429.60 to a person for AFCA’s determination and notified ASIC. As a result, ASIC cancelled Ultiqa’s AFS and credit licences on 16 October 2024.
Where the CSLR pays compensation to an eligible consumer in relation to an AFCA determination and notifies ASIC of the details of the firm that failed to pay the compensation, ASIC must cancel the Australian financial services licence and credit licence of the firm.
The cancellation is not subject to discretion or merits review.
This is not ASIC’s first regulatory action in relation to Ultiqa. On 3 November 2021, ASIC commenced proceedings against Ultiqa. On 17 May 2022, the Court found that between October 2017 and March 2019, financial advisers acting as authorised representatives of Ultiqa advised consumers to invest in the Ultiqa Lifestyle Scheme, a timeshare scheme, despite such advice not being in the consumers’ best interests and not being appropriate to their circumstances.
The CSLR was established in June 2023, commencing operations in April 2024. It can pay up to $150,000 in compensation to consumers who have an unpaid determination from AFCA relating to authorised personal financial advice, credit intermediation, securities dealing or credit provision, and where other eligibility criteria are met.
The AFCA complaint process must first be completed before a claim can be lodged with the CSLR. All reasonable steps to obtain compensation from the financial firm must be taken before a CSLR payment can be made.
ASIC’s decision to cancel the AFS licence and the Australian credit licence of Ultiqa follow previous ASIC decisions. On 19 August 2024, ASIC cancelled an AFS licence of Libertas Financial Planning Pty Ltd (in liquidation) following a CSLR payment. Similarly, on 10 September 2024, ASIC cancelled Australian credit licences of Ultimate Credit Management Pty Ltd (in liquidation) and Worry Free Finance Pty Ltd, and Ferratum Australia Pty Ltd on 4 October 2024.