ASIC targets payday lenders with new powers

ASIC/asic-regulation/

9 July 2019
| By Laura Dew |
image
image
expand image

The Australian Securities and Investments Commission (ASIC) has proposed the first use for its product intervention powers will be addressing significant consumer detriment in the short-term credit industry.

These powers would allow ASIC to intervene where financial and credit products had resulted in, or were likely to, result in significant consumer detriment. This particularly targeted a model where products provided consumers on low income or in financial difficulty with short-term credit at high costs.

One specific model used by two firms, Cigno Pty and Gold-Silver Standard Finance Pty, involved a short-term credit provider and associate who charged fees under separate contracts, which added up to around 990 per cent of the loan amount.

ASIC commissioner, Sean Hughes, said it had already received ‘many instances’ of these types of products affecting consumers.

“Sadly, we have already seen too many examples of significant harm affecting particularly vulnerable members of our community through the use of this short-term lending model. Consumers and representatives have brought many instances of the impacts of this type of lending model to us.

“Given we only recently received this additional power, then it is both timely and vital that we consult on our use of this tool to protect consumers from significant harms which arise from this type of product.”

ASIC said it would consult with affected and interested parties before exercising these product intervention powers and people would have until 30 July 2019 to submit their input via [email protected]

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

3 weeks ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 6 days ago

One licensee has lost 27 advisers in the past week, now sitting at zero, according to the latest Wealth Data figures....

3 weeks ago

TOP PERFORMING FUNDS