The Australian Competition and Consumer Commission launched Federal Court proceedings against Queensland-based mortgage broker Refund Home Loans, alleging that its founder Wayne Ormond mislead franchisees by suggesting he had a “special relationship” with the ACCC.
The competition watchdog alleges that Ormond told current and former franchisees that the ACCC had advised Refund Home Loans about its conduct towards franchisees and that the ACCC had approved action taken by Refund in regards to disputes it had with franchisees.
The ACCC wants statements from Ormond and Refund that its conduct breached the Trade Practices Act, personal TPA training for Ormond and Refund staff, and costs.
The ACCC began proceedings against Refund in the Federal Court in Brisbane on 12
October and a scheduling conference has been listed for 4 December.
Refund Home Loans, which was ranked 43 on SmartCompany’s Smart50 list, has grown quickly in the last few years, with average annual revenue growth of 42.5% over the past three years and revenue of $15.5 million in 2008-09. The company has more than 300 franchisees.
Ormond is no stranger to dealing with the ACCC. Back in 2007, he made a complaint to the ACCC over the way Australia’s big four banks were dealing with the refund mortgage broking model, whereby part of the commission earned by the mortgage broker is refunded to the customer.
In August 2007, the ACCC took action against the ANZ Bank, alleging the bank had breached the TPA by seeking to limit the level of refund that broker Mortgage Refunds (which Ormond acquired in April 2007) could provide to customers in respect of ANZ home loans.
Ormond was not available for comment prior to publication.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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