Payday lender Nimble has been ordered to refund more than $1.5 million to over 7,000 customers after ASIC expressed concerns that it was failing to meet its responsible lending obligations.
Following a significant investigation, ASIC said it identified deficiencies in Nimble’s compliance with the responsible lending laws when providing short-term loans to consumers.
According to ASIC, Nimble had not properly assessed the financial circumstances of many consumers before providing them with loans.
“Nimble relied on algorithms which did not properly take consumers’ financial information into account,” it said.
ASIC said Nimble also failed to consistently recognise consumers who had obtained repeat loans from payday lenders within short periods of time.
“Even where repeat loans were properly identified, Nimble did not take sufficient or appropriate steps as required by law before providing a loan to the consumer,” it said.
“Nimble failed to make proper inquiries of consumers’ requirements and objectives, and inquiries that were made were of a general nature and resulted in not enough information for Nimble to fully understand the consumers' needs,” the regulator added.
As part of its undertaking to ASIC, Nimble is required to pay more than 7,000 consumers in excess of $1.5 million through a consumer remediation program overseen by Deloitte Touche Tohmatsu.
The payday lender is also required to make a $50,000 contribution to Financial Counselling Australia, and engage an independent external compliance consultant to review their current business operations and compliance with the consumer credit regime and report back to ASIC.
Peter Kell, deputy chair of ASIC, said the outcome is significant for financially vulnerable consumers.
“This outcome is a further example of ASIC’s strong focus on the payday lending sector,” he said. “This remains a high priority area for ASIC and we expect the industry to continue to lift its game.”