Consumers advised to be vigilant about entities claiming to be banks
The Australian Prudential Regulation Authority (APRA) has secured a Federal Court injunction against Robert Bruce Gray, prohibiting him from conducting unauthorised banking activities in Australia.
The court’s ruling, delivered on Tuesday, also forbids Gray from using the term “bank” or any similar terminology in his business operations without a proper licence.
The legal action by the prudential regulator, initiated last September, targets Gray’s activities related to his businesses, notably the Commercial Development Bank and Creditnet Bank Internationale, which he has marketed as banks despite lacking the necessary authorisation to operate as such under the Banking Act 1959. This act mandates that only authorised deposit-taking institutions (ADIs) licensed by APRA may offer banking services and use banking-related terminology in Australia.
Justice Yaseen Shariff’s orders, effective immediately, prevent Gray from conducting any banking business, using the term “bank” in any business context, or suggesting any unauthorised entity is a banking business.
Gray, who did not participate in the legal proceedings, faces consequences for not complying with previous APRA demands to cease his unauthorised banking operations. He is also required to cover the legal costs incurred by APRA during the proceedings.
The case marks the second recent instance where APRA has successfully intervened in the Federal Court to stop individuals from engaging in unlicensed banking practices.
APRA deputy chair Margaret Cole emphasised the importance of consumer vigilance, advising the public to research thoroughly before entrusting their funds to entities claiming to be banks.
“APRA protects bank depositors through its licensing regime, prudential framework and active supervision,” Cole said. “We have taken action once again to prevent Australians mistakenly believing they are depositing money with an APRA-regulated entity and receiving the same protections. We will continue to hold entities and individuals to account to ensure that Australians’ financial interests are safe.
APRA encouraged consumers who are uncertain about the legitimacy of a financial institution’s banking status are encouraged to consult the register of authorised deposit-taking institutions or reach out directly to APRA for confirmation.
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