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BFCSA: Dear PM Our sheer disgust that ASIC aware and concerned re Sterling in 2015 and kept silent # 11

Posted by on in ROYAL COMMISSION INTO ASIC NEGLIGENCE
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14th July 2019

 

PRIME MINISTER of AUSTRALIA

Hon. Scott Morrison MP

Department of Prime Minister and Cabinet

P O Box 6500  Canberra ACT 2600

  

Re – Sterling First Group Collapse & ASIC’s Appalling Negligence

 

Dear Mr Morrison,

 

My wife and I are victims of the Sterling First Group financial collapse.

I am writing this to bring to your attention the dire situation we find ourselves in due to the collapse of the Sterling First Group but more importantly to express our sheer disgust at ASIC’s lack of action in this matter in the knowledge and now evidence that ASIC was aware and concerned about the product Sterling First were selling to vulnerable pensioners like us as early as 2015, but more importantly had commenced an investigation into the Sterling First Life Lease product and kept silent about it.

 Sterling First were selling to vulnerable pensioners like us as early as 2015, but more importantly had commenced an investigation into the Sterling First Life Lease product and kept silent about it.

 Denise Brailey, President of BFCSA, Banking and Finance Consumers Support Association (Inc) who is representing all victims of the Sterling First fiasco (tenants and landlords) has recently written to you providing you with a  very detailed and accurate account of ASICs shocking neglect and role in allowing the Sterling First Group to operate and to steal our money is very self-explanatory and needs no further comment from us.

 However we are writing to you Mr Morrison as Prime Minister of this great country we live in to share 3 key points with you:

 Our personal situation

  1. ASICs Negligence and Incompetence (from our perspective)
  2. Centrelinks’ Confusing Position on Rent Assistance (RA)

 

1.     Our Situation

 

After 50 years of hard work and never being unemployed and paying our taxes year in year out without ever needing to rely on Government handouts we retired in 2017. During our pre-retirement planning we considered a number of options to secure a comfortable retirement to ensure we were self-sufficient until we departed this earth. The opportunity to secure a ‘life lease’ on a property such as was being marketed by Sterling First was very appealing.

We subsequently signed up to a Sterling First life Lease on 18th April 2018, 3 years after ASIC had knowledge and concerns about the product. We carried out a thorough due diligence of Sterling First and didn’t enter into this Life Lease lightly, this was to ensure we would be comfortable in our retirement in the knowledge that we couldn’t afford to buy a house but would have security of living out our remaining years with a ‘Life Lease’ for up to 40 years, hence committing our life savings of $254,000 to ensure our rent  was paid  each week and we would have the finances available to use in the event either one or both of us required nursing home care due to old age or poor health.

 

2.     ASICs Negligence  and Incompetence

  

  1. Whilst ASIC as the nation’s regulator can’t be responsible for Sterling First’s collapse it is and has been responsible for not taking appropriate action to stop the Sterling First Group from selling products that did not meet the regulator’s (ASIC) requirements, ASIC as the government’s regulator had a responsibility to act to protect vulnerable people like us from entering into a financial arrangement with a group of companies that ASIC had serious concerns about.

      2. As part of our due diligence in late 2017 we were advised by Sterling First’s sales person that some promotional documentation was held up as ASIC                had requested some changes to the wording in certain documents but other than that ASIC had no other issues. Following that I searched the                          Internet for anything related to Sterling First and could only find positive reviews especially from investors reviews in on line forums that this was a                    great product.

 

 

  1. There was absolutely nothing on the internet or in the print media from ASIC to warn the public that ASIC had concerns about Sterling First and that ASIC were in the process of an investigation, had they done so we would not be in the dire situation we now find ourselves in not knowing if we are going to be evicted as we can’t afford to pay rent out of our fortnightly pension and with no other income.

 

  1. ASIC investigators were interviewing a number of SNL tenants as part of the investigation in same time frame that we entered into the arrangement with Sterling and still allowed Sterling First to continue selling a product that ASIC had serious concerns about. The ASIC ‘investigators’ who interviewed the SNL tenants never mentioned to them why they were being interviewed or advised them of ASICs serious concerns about the Sterling Groups on going ability to continue to sell the Life Lease product, they just wanted to see if ‘everything was alright’  What was the relevance of that?

 ASIC failed us and the other 100 Life Lease couples who all are in same situation and failed the property owners who were also scammed into signing their properties into a scheme that was doomed to fail. ASIC must make this right and as the nation’s regulator ASIC and The Federal Government must accept responsibility and accountability for total inaction and compensate each and every one of us without delay.

I don’t have a legal background but this must be considered to be one of the worst cases of failure by a Government  regulator (ASIC) in being totally negligent in not carrying out the very thing that ASIC was established for and has to be considered to be a total disregard and neglect of the regulators responsibility.

 

3.     Centrelinks Confusing Position on Rent Assistance (RA)

 

A number of Sterling tenant victims of this fiasco have recently been to Centrelink to report their changed financial circumstances as a result of our monies being stolen by the directors of the Sterling First Group only to be told that the Rent Assistance we had been receiving we shouldn’t have received as Centrelink had deemed that we were home owners not renters.

 

There are two issues here:

 

1.   When they applied for Rent Assistance they provided all the required documentation including all the relevant documents from Sterling First showing that they were entering into a long term lease arrangement – 20/30 or 40 year lease - and Centrelink approved the rent assistance. a position that  as such Centrelink now have  the granting of RA was incorrect and they are demanding back payment of the RA which in some cases is up to $10,000. If there was some sort of ruling by Centrelink why didn’t they publicise it and enforce it at the time of application for RA? This is a “kick in the teeth” for us as victims of this scam, where is the compassion and caring for our elderly?

 2.   The second point is, we are not home owners , we have landlords who we are paying rent to, how can we be “deemed” to be homeowners in this circumstance?   – a ridiculous position for Centrelink and the Government to take.

 

To conclude Prime Minister

 

Prior you becoming Prime Minister and in your previous portfolio of the nation’s Treasurer your support of the nation’s elderly was questionable but now as our Prime Minister we can see a change in your rhetoric i.e. during the recent election campaign you were very vocal and adamant that ‘people matter’ in Australia, and importantly the elderly were singled out here with a promise of on-going Coalition support.

 The announcement today 14th July that you have approved the lowering of the deeming rates is further evidence that your commitment during the election campaign to support the elderly is encouraging.

 Mr Morrison this is another opportunity for you to deliver on that promise and show the strong leadership you demonstrated during the election campaign and rectify a wrong that has been created by ASIC and compensate the Sterling First victims of our life savings that we would still have had ASIC carried out their role and responsibilities as they are chartered to do.

 As well as your personal leadership, this situation also requires strong whole of Government intervention to rectify this wrong and compensate all victims created by ASICs neglect and incompetence, (the current estimate is  $36m) we can then and only then get on with living out our twilight years in the way we had planned.

 Please ask your Minister of Centrelink Mr Stuart Roberts MP to sort out the centrelink mess for us and not put pressure on is for the $10,000 which was the Minister's error, not ours.

 We really do have enough trouble with ASIC and their corrupt way of dealing with things and do not want to battle Centrelink as well.  That is so unfair.

 

Yours sincerely

 

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