A company that offered loans to people to attend seminars run by high-profile property developer Henry Kaye has been ordered to pay $100,000 after breaching the consumer code.

Australian Finance Direct (AFD) offered the loans for people to attend seminars run by Mr Kaye’s National Investment Institute (NII) and related companies.

But the Victorian Civil and Administrative Tribunal found AFD broke the consumer code by charging and not disclosing to customers a “hold-back fee”, which was kept by the company.

The amount of the fee ranged from an “interest free” hold-back of 10 per cent of the amount of the loan, to up to 40 per cent on high-risk loans.

More than 2,300 Australian consumers entered into contracts with AFD, including more than 1,100 Victorians.

Victorian Consumer Affairs Minister Tony Robinson said the breach was found to be “deliberate” and “serious”.

“Consumers are entitled to know the real cost of borrowing so they can make meaningful comparisons with other financial products and make informed decisions about whether or not to go into debt,” Mr Robinson said.

The NII was placed in liquidation in 2004.

Charges against Mr Kaye over an alleged $18 million fraud relating to a property development were dropped by the Australian Securities and Investments Commission (ASIC) last April.

AAP