Fines and penalties for breaching regulations, including best interests duty (BID), have increased from July 1, 2023, and finance brokers should take note, the FBAA’s managing director Peter White AM has warned.

Mr White said ASIC’s penalty unit value has increased from $275 to $313 meaning the maximum penalty for individuals is now $1.565 million or “three times the benefit obtained and detriment avoided”.

He said while brokers rarely do the wrong thing, it is a timely warning that there is a legal obligation to always act in the best interests of the borrower.

“What sets finance and mortgage brokers apart from banks and others is that we must act in the customer’s best interests, and this is a great point of difference,” he said.

Mr White said that he felt the increase was an opportunity to remind brokers of the importance of maintaining the high standards the industry has set.

“As I meet with senior ministers and regulators, I am often complemented on the integrity across our industry and the way brokers conduct themselves, and we should be proud of that.”

He pointed out that the maximum fine at the implementation of the BID was $1.11 million.

“This is an increase of $455,000 or more than 40 per cent, and demonstrates the government’s determination to enforce regulations.”