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Jailed National Finance boss Ludlow first person to get indefinite ban from lending

Tuesday 6th December 2011

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Jailed National Finance boss Trevor Ludlow has become the first person to be banned indefinitely from operating or working in consumer finance after being convicted of misleading borrowers.

Judge Lawrence Hinton made the order in the North Shore District Court today, in a judgement against Ludlow’s Takarunga Management, which traded as Mortgage Rescue. The ban was the first of its kind to be issued under the Credit Contracts and Consumer Finance Act, and indefinitely prevents Ludlow from working in the sector.

The lender was convicted of charging an unreasonable cancellation fee and not passing on legal fees at cost, and of serving a default notice before it was legally entitled to.

In the judgement, the judge said Ludlow’s response to borrowers who cancelled their contracts or disagreed with him was “clearly unlawful and in the circumstances, outrageous” and that he “lacked the skills to be in the industry.”

Judge Hinton imposed a $29,000 fine on Mortgage Rescue and a $1,000 fine on Ludlow, and ordered reparations of almost $24,000 to borrowers.

The Commerce Commission prosecuted Ludlow under the Credit Contracts and Consumer Finance Act and Fair Trading Act.

“Mr. Ludlow’s conduct was very poor and we are pleased that he has been removed from the industry, as this was a key reason for the prosecution,” said Graham Gill, competition manager at the regulator, in a statement.

Takarunga Management was set up in May 2006 to aid in the receivership of another finance company and later branched out into mortgage lending.

In October, Ludlow was sentenced to six years in jail for defrauding National Finance investors of some $3.7 million by breaching the lender’s trust deed. That sentence is the biggest handed down to a finance company executive since the sector’s collapse in the past five years.

(BusinessDesk)

BusinessDesk.co.nz



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