Powered by MOMENTUM MEDIA
Mortgage business logo

ASIC seeks court order to wind up lenders

The corporate regulator has commenced proceedings for recovery of unpaid fines against a number of Queensland-based payday lending companies.

The companies in question include Fast Access Finance Pty Ltd, Fast Access Finance (Beenleigh) Pty Ltd and Fast Access Finance (Burleigh Heads) Pty Ltd (the FAF Companies).

In March 2017, the Federal Court fined the FAF Companies a total of $730,000, after finding in proceedings brought by ASIC that the FAF Companies breached consumer credit laws by engaging in credit activities without holding an Australian credit licence.

The FAF Companies operated under a business model where consumers seeking small-value loans were required to sign documents which purported to be for the purchase and sale of diamonds in order to obtain a loan.

The reality was that there were no diamonds, and it was instead a sham designed to avoid consumer credit laws.

ASIC has applied to the Supreme Court of Queensland for orders to wind up the FAF Companies as a result of the non-payment of the fines.

The winding-up applications will be heard in the Supreme Court of Queensland on 28 February 2018.

md discover

ASIC was successful in obtaining orders against the FAF Companies in September 2015 and fines were imposed in March 2017.

In March 2015, ASIC released a report on payday lenders, which ultimately found articular compliance risks around the tests for loan suitability.

The report — based on ASIC’s review of 288 consumer files for 13 payday lenders who are responsible for more than 75 per cent of payday loans made to consumers in Australia — found some lenders engaging in conduct that risks breaching responsible lending obligations.

It also found systemic weaknesses in documentation and record keeping, including around the issue of the consumer’s objectives and needs.

Share this article
brokerpulse

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

brokerpulse graph

What are the main barriers to securing a mortgage at the moment?