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JOHN BISSET / THINGS
The Home Funding Group told aspiring homebuyers that it could help them save for a deposit. Instead, they found that they had lost all the money they had “saved” with him.
An Auckland company that falsely claimed to offer a savings plan to help low-income families buy a home was fined $ 400,000 following a Commerce Commission investigation.
Home Funding Group (HFC) was convicted in January on two counts under the Fair Trade Act in Auckland District Court.
But the company is being liquidated, and in his October report, liquidator Imran Mohammed Kamal said the company had no assets.
Its sole director is Luke Steven Atkins of Henderson, although the company is owned by Olga Atkins of Christchurch.
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The company offered services to prospective home buyers who found it difficult to save for a deposit or qualify for bank financing, the Commerce Commission said.
“He claimed to operate a savings plan that could help clients buy a home with a deposit as low as 5 percent. However, customer payments were not credited or treated as if they were a savings plan, ”said commission chair Anna Rawlings.
The contracts that the clients signed were for a financial intermediation and coaching service.
Between February 2015 and April 2017, HFG received $ 316,361 from 149 clients, who generally paid between $ 50 and $ 100 per week.
“The claims made by HFG prompted consumers to make regular payments to HFG in the belief that they were putting money into a housing deposit. They weren’t, ”Rawlings said.
“In fact, they were paying for financial services and the HFG contract allowed HFG to limit or avoid providing those services,” he said.
She said that HFC told clients that at the end of the contract term, clients would get back the money they paid to HFG to use for a house deposit, and that HFG had special relationships with several banks.
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But Rawlings said: “HFG had no special relationships with any bank. The money paid could not be used for a deposit, and the commission is not aware of a single customer who has completed the HFG contract and successfully purchased a home. “
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Commerce Commission Chair Anna Rawlings said the commission did not know of a single person that Home Funding Group had helped purchase a home.
In sentencing statements, Judge Bouchier said it was a “carefully crafted plan” and that the conduct involved “serious crimes against vulnerable people.”
The affidavits of four victims who were unable to buy houses were heartbreaking, Bouchier said.
HFC was ordered to make full refunds to eight people who complained to the commission.
Kamal described HFC as a “mortgage broker” based in Henderson, Auckland.
“The director provided misleading and deceptive services to clients. The director reported that he did not have sufficient funds to defend the company, ”Kamal said in October.
Kamal was appointed a liquidator in March of last year. At the time, the company had only $ 4,540 in its bank account, Kamal reported. After the settlement fees, which had fallen to “zero” in October, it reported.
HFC operated under different names after its founding in 1999, including the Welcome Home Foundation.
Peter Meecham / Things
Before it was called the Home Funding Group, Luke Atkins’ company was called the Welcome Home Foundation.
The commission charged HFCs in April 2019.
The victims were from Auckland and Wellington, the Commission said when it pressed charges.
