ASIC to force lenders into involuntary liquidation

The Australian Securities and Investments Commission (ASIC) has obtained orders “winding up” car finance providers Channic and Cash Brokers as well as payday lender Fast Access Finance for their failures to pay fines and cash orders awarded to the regulator by the Federal Court.

Bankruptcy proceedings were also commenced by ASIC against the director of the companies Colin William Hubert. Mr Hubert, however, declared himself bankrupt prior to the hearing.

In April 2017, the Federal Court fined Mr Hubert and his two companies a total of $776,000, and ordered the payment of $420,000 to cover ASIC’s costs, after the court found that the two companies had breached responsible lending obligations outlined in the National Credit Act.

Mr Hubert and his companies were found to have engaged in “unconscionable conduct” and entered into “unjust transactions”, with the owners also operating a used-car dealership in Cairns.

ASIC launched civil penalty proceedings against the parties after the Indigenous Customer Assistance Network (ICAN) reported that the companies were charging 48 per cent interest on loans obtained for cars from the related dealership. Consumers were also charged brokerage fees of up to $990.

The Federal Court also rewarded a total of $47,699 to affected customers, which remains unpaid.

ASIC has also obtained orders winding up payday lender Fast Access Finance and two of its franchisees based in Beenleigh and Burleigh Heads, after failing to pay fines to ASIC following breaches of consumer credit laws.

In March 2017, the Federal Court fined the companies a total of $730,000 after they engaged in credit activities without an Australian credit license (ACL).

The companies were charged with issuing small-value loans to consumers that required borrowers to sign documents purported to be for the purchase and sale of diamonds in an attempt to avoid consumer credit laws.

[Related: ASIC seeks to bankrupt car lender director]